Introduction
Having made the decision to go contracting you will now need to do the
following:
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Quit your current job.
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Secure a contract.
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Consider the IR35 status of the contract.
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Decide on a payment structure.
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Choose an accountant or umbrella company for the payroll.
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Sign contracts.
Step 1 - Quitting your current Job
The vast majority of contracts (this means 99.9% of them) will require you to
interview immediately or within the next couple of days and start within at
most the next couple of weeks.
There are some contracts who state they will wait 4 weeks for the right person,
but this is only because they are hard to find and have no other choice.
So, you will need to quit your job and start looking for contracts at the most
4 weeks before you are due to become available.
Step 2 - Secure a contract
a most effective form of job search is using internet advertising boards
Career Consultancy Services
You can either go via an agency or direct to the client. Unless you have a good
network of contacts it is most probable you will need to use agencies.
Whilst it is worth emailing your CV to everyone on the planet just to get on
the agency databases a most effective form of job search is using internet
advertising boards, Jobserve being the no1 place to look.
Step 3 - Consider the IR35 status of the contract
You can either do this yourself, or seek expert advice from a qualified lawyer
who specialises in employment law.
We discuss the option of seeking advice from HMRC in our article
should you send the contract to HMRC?
Some accountants have also learnt the IR35 buzzwords and legal basics of IR35
and offer status reviews. Some larger accountancy firms have qualified in house
lawyers who do the reviews. It is worth asking the qualifications of the
reviewer.
Step 4 - Decide on a payment structure.
This is either a “one person” limited company, where you are the director and
shareholder or an umbrella company solution.
We discuss this fully in our article
Limited Company or Umbrella: Deciding on a Payment structure
Step 5 - Choose an accountant or umbrella company
The following articles discuss the details to help you make the right choice:
Choosing an Accountant for your Limited Company
Setting Up a Limited Company
Choosing an Umbrella Company
Joining an Umbrella Scheme
Step 6 – Signing the Contracts
If you decided to go down the limited company route then you will need to:
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Send your new limited company details to your agency
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Sign the agency contract for the agreed period/hourly rate as company director
for your new limited company
If you decided to go down the umbrella route then you will need to:
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Sign the umbrella company provider’s contract for services (their terms and
conditions)
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Advise your umbrella company the details of your agency and contract for
services
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Advise your agency the details of your chosen umbrella company provider
The umbrella company and agency will then liaise to sign a contract for your
services, working through the umbrella company. Some agencies will require you
to countersign the contract, following it’s signature by a director of the
umbrella company
Updated Wednesday, October 25, 2006, [Originally published Tuesday, May 11, 2004]
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