What is Contracting? Contractors offer consultancy services to a company for a set period of time. Companies may choose to engage contractors instead of permanent staff to complete a one off project or to meet short term fluctuations in business activity.
You will contract with a company, usually through a recruitment agency, to perform predetermined tasks over a set period of time, although it is commonplace for the contracts to be extended.
What are the Advantages of Contracting? There are some significant advantages to be gained when contracting. Foremost is that contractors can expect higher rates of pay than their permanent counterparts. This applies to both basic pay rates and overtime rates. In some cases, contractors can increase their “take home” pay by using limited companies.
Secondly, as a contractor you have complete flexibility in how you work. You can decide what holidays you want to take and for how long – this is especially useful for people entering the UK on working holiday visas.
Thirdly, you will be exposed to a significantly higher number of companies and individuals. As a result you can gain a greater breadth of experience more rapidly than you would in a permanent position.
What are the Disadvantages? Contracting is not for everyone. If you don’t feel comfortable working in different environments or working with different people on a regular basis, you need to consider whether contracting is the right career path for you to pursue.
There are a number of disadvantages that need to be highlighted. Permanent employees enjoy access to company benefit schemes such as contributory pensions, healthcare and training. A company may also provide their employees with full sick pay, as a contractor you will have to settle for statutory sick pay so you will need to have a reserve fund to help you through these periods.
Finally, you may find that you have time between contracts where you can’t find work. Market conditions or seasonality are common causes. Faststream will endeavour to ensure that you are out of work for the shortest possible time however, the causes of the breaks between contracts are generally outside our control.
How do I start? Now you have decided that you want to work on a contract basis, you will need to get in touch with a Faststream Consultant. They will talk to you to find out what type of work interests you and then forward your CV to our clients. They will then guide you through the interview process and negotiate pay rates with the client on your behalf. Once you are offered the position we will guide you through the administration, after which you will be working as a contractor.
How do I get paid? Each week you will be issued with a timesheet. At the end of each week you will complete the timesheet with the number of hours / days worked and get your line manger to authorise it. You would then send the timesheet to Faststream for processing. Faststream will then pay all timesheets received on the following Friday direct into your bank account by electronic transfer. (Note: processing deadlines are stated within the contract that you will receive from Faststream).
Can I work through my own Limited Company? Yes. Working through limited companies is becoming increasingly popular with contractors. To find about the differences see our Limited Company or PAYE? Factsheet.