Contractor’s Guide

New to contracting? Our comprehensive guide to contracting is here to help you get started.


Deciding to work for yourself is an exciting step in your career and one which very few regret. When you make the first step into self-employment, there’s a lot to look forward to in your future, but there are also a number of considerations which you will need to think about before you begin.

If you’re thinking about contracting and you’re in the early stages, research is key. Our comprehensive guide to contracting is here to help.

What’s inside our contractor’s guide?

  • Getting started – discover which business structure is best for you and how to get started.
  • Your tax and financial obligations – all you need to know about your paying tax, filing accounts and what costs you offset.
  • Making your business a success – learn how to grow your business, how to market yourself and to forecast for the future.

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How should I operate?

How you choose to operate could impact your level of responsibility, the work you take on and your take-home pay.

Your situation will ultimately dictate which route you should take, but there are generally three different routes to self-employment:

  1.    Limited company
  2.    Umbrella company
  3.    Sole trader

How do I get started as a limited company contractor?

Making the move into contracting and going limited can be a simple process:

  1. Form a limited company - the application just takes five minutes and your company should be set up within a few hours. The cost of formation on the SJD website is £125 plus VAT. We will also help you with VAT and PAYE registration and setting up a business bank account.
  2. Invoice your client/agency - we provide you with a template. Complete a very simple Excel spreadsheet, similar to an expense claim form which should take about 15 - 20 minutes per month to complete.
  3. Appoint an accountant - forward any correspondence you get from HMRC or Companies House to your accountant and they will take care of it for you.

Why should I go self-employed?

If you’re thinking about becoming a contractor, here’s a couple of good reasons:

  • Increased take-home pay - when you’re self-employed, you’ll generally earn more than your permanent employee counterpart for the work you do.
  • Freedom - becoming your own boss means you have more control over when and when you work.
  • Variety of work - you can take control of your career progression and your development, which means learning what you want and choosing your own job title.

Got a Niggling Question?

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