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.

Download 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 Permanant 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!


View accountancy packages

Other Contractor case studies include: