1. Raise some funds!
Before I thought about contracting I was doing freelance on the side and saving from my permanent job. This helped me raise a buffer of 4k to enable me in essence to quit my job sit on my backside for 3-6 months and still pay my bills and live my lifestyle. Agencies are really interested in getting a contract in 1 or 2 months it’s usually weeks. In my case I quit my job and didn’t have a contract lined up as I was on a 2 month notice period. That money would help me pay my bills whilst I searched for my contract. 2 weeks left of my notice period I had secured myself a contract and started the day after I left my permanent role! I didn’t need that money in my buffer so I have put it in an account to sit for a rainy day or the next time I am looking for a contract.
2. Register your business
Limited Company
The vast majority of IT contractors work through their own Limited Company.
If you wish to set up your own Limited Company, you can use the ContractorUK Company formation service which enables you to complete the whole process on line within a matter of minutes, and have your brand new Company ready to trade within a few hours. You can check to see if the name you require is available here also. Alternatively, you can apply for a limited company direct from Companies House (but this will take longer).
Umbrella Company
An Umbrella Company provides a readymade invoicing vehicle for contractors whilst also removing the administrative duties normally associated with contracting in the form of a Personal Service Company. The Umbrella Company normally issues invoices on the contractors behalf, collects payments from clients/agencies, calculates tax and N.I contributions and pays the contractor their net pay direct to their personal bank account.
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