Introduction to Contracting in UK

As name suggests, contract employment is a temporary type of employment and it has its own share of advantages and disadvantages, like any other jobs type. A contract job is a category of work that includes a variety of different positions which range from temporary jobs to freelance positions and these kind of jobs are available for a set period of time – for example, a company looking for some extra help for a particular project might hire couple of freelancers for a defined period of time on a set salary or they may need someone to fill in for an employee who is on maternity leave or vacation so that the job or business is not affected in any way. Contracting jobs can last anywhere from a few weeks to months and even years in certain cases.

As a contractor, you are not an employee on the payroll of the company you are working for. Depending on the company that you are working for (small business or a limited company ) you might get paid on hourly, weekly or monthly basis and depending on the position; you might be working for the company from 9 to 5, five days a week, like any other employee of the company and apart from the terms and conditions of your contract, you may or may not be treated like an employee of the company and be expected to represent the company as one of its employees. However, in certain cases, you may come to office for just few days in a week or might be working remotely from your place. Terms like how, when and where you will be working from, are set out for you at the time your contract is set and in case you have any reservations on any of the points mentioned in the contract term, you can discuss the same with your manager.

However, contract jobs are different than temporary jobs , wherein later are less formal and also lasts for a shorter period of time. In most of the cases, temporary jobs last anywhere from a single day to a few days a week, except in certain exceptions where they may last for few years. Temporary jobs are usually secured through a temporary agency or through a headhunter who works with the companies directly to provide them the temporary workers. Also the temporary jobs do not require much of formal training, for example – posts of a receptionist or a secretary does not require much of a formal training and they can straight away walk into the office for the work, if hired.

A very common type of contract jobs is those of freelancers and it has many faces. At times, freelancers are self-employed, who works as per their hours and from their place, offer their services to whomever they want and are absolutely free to accept or deny any jobs. In certain cases, they may have contracts to contribute to a company on a regular basis – for example, a freelance photographer may be committed to submitting couple of photos for a particular edition or a publication once a month or twice a month. Now he can do this work as per his own timings as far as he is submitting within deadline. Freelancers are usually paid for each individual project.

Contractor Mortgages in UK

Getting mortgages is a difficult task for IT contractors as most bankers are not well aware of the processes involved. However, that is the reason why DNS joined hands with CMME (Contractor Mortgages Made Easy ) to ensure that the mortgage process is streamlined and no hassles are faced by the contractor.

Contractor Mortgages

Advantage of Contracting Jobs:

Contracting jobs are best for those who are not able to land a permanent job for themselves or for those who don’t want to work for one company and want to explore more than one opportunity. Contracting jobs provide them with flexibility and choice. The main advantages of contracting job over a permanent job are:

1. Choice: With a contracting job, one gets to explore more options because firstly you are not tied up with one company and are free to work on a contractual term with other companies as well.

2. Abundance of Work: With contract employment, there is no dearth of work ever and enough opportunities are available all the time and thus provide options and choice to the employees. In case, if the employees are looking for a specific job, they can opt for freelancing which will give them the a chance to choose their kind of work, however if the idea is to lock more number of hours, it is best to opt for part time contracting jobs.

3. Less Competition: This is another advantage of working on a contract based employment and employees do not have to face cut throat competition, which is quite common in full time employment and since there is lesser competition, one can see and assess themselves on what they are good at and how well they can perform a given task.

4. Higher Gross Salary: Contrary to the common belief, contracting jobs, if done well, do pay quite well and at times even more than a permanent job.

5. Flexibility: The reason why contracting jobs are getting popular with the youngsters is because of the flexibility they offer which is not with the case with the permanent jobs.

6. Continuous Growth: In case of a permanent job, one gets stuck with a single profile for a long period of time and thus growth lacks there however with the contracting jobs, one gets to explore more options and it allows you to grow in a balanced manner.

Disadvantage of Contracting Jobs:

1. Job Security: It goes without saying that there is no job security when it comes to a contracting job, which is not the case with a permanent job.

2. Tax Information: In case you are a full time employee with a company, you will be constantly reminded about your tax obligations and in most of the cases, tax is deducted at the source before the salary is paid. However, in case of contracting jobs, since you are not on the payroll of the company, you have to take care of your tax obligations by yourself and to calculate all the tax returns you are liable to, becomes a tedious process.

3. Creating a Brand: In order to create a brand, one has to start with real low salary and might have to work more for less pay to create their brand in the market and in the process of doing so, the motivation level might goes down.

4. Burden: When you work for different companies with different confidentiality expectations, one simple error might lead to sudden termination and in certain cases, it could follow to law suits as well and even though it might turn out in your favor, it is highly stressful and time consuming. Also it decreases the motivation level and hampers the brand that you have created.

5. Time Management Issue: Main issue with the part time contracting jobs is that one tends to commit to more projects than he or she can handle. It is often seen than the employees often waste time and resources and at the end do not find value in what they are doing. If not managed well, projects go haywire, however if manage well, the work goes on smoothly without any problem.

Construction Contractor Jobs in UK:

There was quite a recession in the United kingdom construction market , however it is again enjoying a resurgence after a challenging time. As a result of financial crisis, construction companies were no longer looking forward to start new developments but with the new market and improvement in economic circumstances, there are more job opportunities available and there is a sizable increase in the number of building positions available across the country. So, in case you are looking for a construction contractor jobs and have been waiting for a while, this is the right time to find one. With a number of small and large scale developments across the country, there are plenty of construction contractor jobs in the market wherein major positions are available in the South East, Scotland and the North West and the salary ranges from £40k to £60k + per annum.

IT Contract Jobs & IT Staff and Recruiting Services UK:

Information technology is one sector where demand of contract jobs has been always on the rise. One can find more number of freelancers and part time contract workers in the IT field as compared to any other field, mainly because it allows one to work from his or her location. So, in case if you are an employer, having employees on contract basis serves your purpose because firstly you don’t have to worry about accommodating them in the office and their other overhead expenses such as transportation etc, whereas in case you are an individual, you can choose the work as per your choice and expertise and also you can work as per your free time and availability.

As for sole traders , they should be aware about the Self-Assessment Tax Returns that are to be filled by sole traders. Usually the process involves a lot of time and managing a lot of documents, so sometimes it is advisable to seek an accountants help , just to avoid any penalties that might come due to incorrect or late submission.

In the United Kingdom, you can find plenty of recruiting agencies who are helping the companies with the contract employees by advertising thousands of contract jobs on their portal and one can choose from the lot based on his or her expertise.

Click here for Review

Related Post

Self-employed & freelancers – What business expenses can I claim? Self-employed & freelancers – What business expenses can I claim?
Expanding businesses into the UK Expanding businesses into the UK
Mortgage for Buy-to-Let Ltd Company Mortgage for Buy-to-Let Ltd Company
Claiming Capital Allowances on purchase of commercial properties Claiming Capital Allowances on purchase of commercial properties
Why is Nomisma software great for businesses?Why is Nomisma software great for businesses?
DNS Accountants Accountants and Advisors Award Winning Accountants

Trending pages

Other Offices

DNS Associates British Accountancy Award

Vouched For DNS Associaes

Other Locations

DNS Accountants Blog

HMRC Offices

Share this post