Thinking of becoming a contractor?

This guide has been developed following conversations with contractors, freelancers and consultants all of whom are existing SJD clients.

Being a contractor is very different from being employed but you probably knew this anyway. However, in today's competitive climate is there really such a thing as a 'permanent' job? Downsizing, outsourcing, corporate politics and frustrating management structures, can all wear you down. There are obvious benefits but these are gradually being eroded.

Contracting for some may be the perfect option but contracting doesn't come without its fair share of risks and challenges. Generally, as a contractor if you work for a company for a fixed period under a fixed contract, you will essentially be selling your skills and time and usually be paid by the hour. Anecdotal evidence suggests that although contracts are for a fixed time they are often extended but it is always your choice whether you stay or move on to your next contract. Many contractors work for the same company for years and other than a few small tax implications regarding travel costs to and from work, there is nothing wrong with this at all.

Benefits of contracting?

  • Freedom - being able to choose when and where to work;
  • Being your own boss;
  • Money - you'll usually be paid more money than permanent members of staff working on similar projects. The following links will help you to understand more about take home pay and contract amounts: Instant online take home pay calculator and Limited or Umbrella the major differences in take home pay.
  • Doing the type of work you enjoy doing. Often as an employed person you are pulled in numerous directions, as a contractor your work will generally be more focused;
  • Work experience - developing an impressive and varied CV by moving contracts frequently and experience of working in different types of organisations and work cultures;
  • Less involvement in office politics, but this can't be guaranteed;
  • Taking time out - we know many contractors who work extremely hard for 9 - 12 months and then take 2 - 3 months off.

Remember - you always have the safety net that if you don't like contracting you can return to permanent work.

Free Contractor Guides


The pains of contracting

  • Less security - a client ending a contract is a whole lot easier than sacking people or making a role redundant. However, you are protected, you will have a contract which is legally binding for both you and the client;
  • Hassle - because you will be running your own business there will be more administration - having an accountant or using an umbrella company can remove some of the burden but there's no getting away with it, contracting is more work than just getting a pay slip each month;
  • Back up support - there's no HR department or IT support desk to solve issues;
  • No big company pensions, paid holidays, sick pay but hopefully your contract will reflect these loses.

Qualities clients look for in a contractor

  • Skill set - do you have the skills the client is looking for? Keep your skills up to date and read all about the latest changes in the market;
  • Cultural fit - ability to get on with other people, slip straight in and begin adding value immediately;
  • Your costs - is what the client looking to pay in line with your expectations? Again, keep up to date with market trends and contract rates;
  • Must be able to deliver results - clients hire contractors for specific purposes;
  • Able to highlight possible new opportunities. These opportunities incidentally may lead to more work for you;
  • Proactive and a self starter individuals. You will often be briefed at the beginning and then left alone, contractors roles are much more autonomous.

Finding a contract

Do you have a ‘good’ CV? Would you like a ‘great’ CV? Are you a bit rusty on interview techniques? Would you like to know how to negotiate a better rate? Visit SJD's Contractor Careers Centre and download our FREE Contractor's Guide to finding a Contract.

Forming a limited company and next steps

Okay so you have decided to go contracting and to work through your own limited company, but what should you do first? Easy, read our simple 1,2,3 step-by-step guide to working through your own limited company

If you would like to form your own limited company SJD's on-line company formation service offers same-day formations and includes opening a Company Bank Account, VAT/PAYE registration and advice on share structure.

You may also find our Contractor or Permenant Employee guide useful.

If you have any question about contracting or would like any further advice please call our new business team on 01442 275789 or email

Appoint SJD Accountancy and never worry about your tax or accountancy affairs again!

Other Contractor case studies include:

Call Back Request

Enter the characters shown in the image.

Speak to a
friendly expert
01442 275789

Monday to Thursday (8am to 8pm)

Friday (8am to 7pm)

Saturday (10am to 4pm)

SJD Accountancy

SJD Accountancy are the UK's largest specialist provider of fixed fee, Limited company accountancy services to contractors; we've been acting for contractors across the UK since 1992 and have more than 15,000 clients.

We are the only national specialist firm of contractor accountants with offices nationwide. SJD Accountancy has more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATT, AAT, CTA, ACCA, CA, ACA and FCCA.

  • Unlimited face to face meetings. This is a unique service only SJD Accountancy offers - unlimited face to face meetings across the UK - tax is complicated and sometimes only a meeting will do.
  • UK's largest contractor accountants with more qualified staff. No call centres, no outsourcing, no automated call handling. Simply telephone, email or meet your own dedicated accountant face to face.
  • Our Customer Promise. Respond to any question sent to your accountant or any dedicated department within 24 hours.  If we need more time, we will update you as soon as we can and we promise to keep you informed of the progress we are making in answering your question.
  • Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market, including: Best Accountant for Contractors, Accountant of the Year and Best Professional Service Team to name just a few.
  • All inclusive low cost fixed fee accountancy package which includes completion of accounts*, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, your own dedicated accountant* and all company returns for a fixed fee starting from £120 plus VAT per month. Check our packages for more detail.

If you have any questions about contracting or would like any further advice please call our new business team on 01442 275789 or email: Our new business team is open Monday to Thursday (8am to 8pm), Friday (8am to 7pm) and Saturday (10am to 4pm)

Appoint SJD Accountancy and never worry about your tax or accountancy affairs again.

Form your own limited company with SJD - our same day online company formation service includes company bank account set up, VAT/PAYE registration and advice on optimum share structure. 

You may also find the following pages, guides and case studies useful:

*If you would like us to complete your company year end accounts we simply ask that you have been a client of SJD for one year or have made 12 monthly payments. All accountants are part or fully qualified.