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Become an IT Contractor and Take Control of Your Career

If you’re tech-savvy, into programming, and are looking for work or considering a career change, becoming an IT contractor may have crossed your mind. Contractor hiring is on the rise in the UK, and those with specialized tech skills and a self-starter attitude already have some of what it takes to get into the business. Wondering how to make it happen? Below, we’ll lay out the details of what being an IT contractor is and what it entails.

it contractor
If you’re tech-savvy and into programming, becoming an IT contractor may have crossed your mind. Here’s a quick guide! (© unsplash.com)

What is an IT Contractor?

An IT contractor is someone who does IT work for a company on a contract basis rather than as an employee. The type of work can vary quite a bit depending on what the company is looking for and what set of tech skills the person has. Usually, IT contractors have some sort of tech specialty such as cloud-based software, artificial intelligence, or cybersecurity. IT contractors generally sign a contract with a company for a specific project over a series of months, then move on when their contract is up.

Skills and Experience Necessary

IT contracting is a broad field, encompassing a wide variety of tech skill sets. Although there aren’t formally any requirements for going into contract work, education or work experience in the tech industry is a great start. If you’ve been in the same office for a while, some professional development might be worth looking into in order to keep your skills current, or to hone your skills in a particular niche you’re interested in getting into.

Is Contracting for You?

Unlike steady employment where you’re guaranteed a salary and benefits, contract work is much less stable, requiring adaptibility and a willingness to accept a certain amount of risk. The type of work you take on might vary widely from contract to contract, so being a quick learner and having a desire to learn new things is important. If you aren’t a self-starter and like the stability of having a regular job, contract work may not be for you. It’s important to factor in whether or not being an IT contractor will fit your personality before you make the leap. But if you think it’s right up your alley, here are a few more things you’ll need in order to get started:

Getting Started

1. Do Your Research

The tech industry is a notoriously fast-changing field, so it’s important to make sure your skill set is up to date and in line with what employers are looking for before becoming and IT contractor. Large offices often have completely different tech needs than smaller ones, and different industries might need completely different sets of tech skills. If you know how your existing skills fit into the larger market, you’ll know who to market them to – and if you need to update them to stay competitive.

 2. Set Your Rates

Rates depend on a lot of different factors, like where you’re doing the work, what skills you’re contracting for, and what the market rate is for other IT contractors with comparable skills. While you don’t want to set your rates too high to begin with, it’s also important not to set your rates too low – people new to contract work may suffer from “impostor syndrome” and charge artificially low rates, but this can trap you into working for far less than you should. So be careful not to fall into it!

3. Decide: Self-Employed, Limited or Umbrella?

Most IT contractors work as either a limited company or through an umbrella company. While being a sole trader is technically an option, it is unadvisable as their clients might be held responsible for employment benefits under UK law. For this reason, many clients won’t work with sole traders until they incorporate, or form a limited company. Forming a limited company protects the IT contractor as well, since they’re only liable for the money they invest in the business, instead of having their personal assets on the line as they would being a sole trader.

However, limited companies have strict accounting requirements and therefore a lot of administrative upkeep – IT contractors who want to get around this may decide to work through an umbrella company, which acts as an intermediary between the client and IT contractor. The client pays the umbrella company, and then the umbrella company deducts income tax using a PAYE system and pays the IT contractor. With an umbrella company, the administrative work is done by someone else, but has fewer tax benefits – so it’s an easier way for those just starting out to avoid the complex admin work that comes with a limited company.

 4. Get to know IR35 and Tax Law

As a limited company, no National Insurance Contributions are charged for company dividends. Due to government concern that individuals were forming limited companies in order to get out of paying income tax, the IR35 law was passed. It essentially grants the government the power to decide that independent contractors are actually employees under the law, based on a number of standards from case law. If caught as a limited company, you could owe significant back taxes – so make sure your contracts are IR35 compliant, and get to know what the basic standards are for determining who is an employee under UK law.

Finding and Applying for Contract Roles

IT contractors often find their first contracts through recruiters – but you can also find clients through networking, doing your own marketing, and on industry portals. Make sure you have an up to date CV and a LinkedIn profile, with information that matches. Different skill sets may lend themselves to different marketing methods – building a portfolio website, for example, or staying active on industry social media hubs might help you keep current and connected with those likely to hire you.

Becoming an IT contractor can take courage and hard work, but there are lots of IT contractor jobs on the market! Just make sure you take the time and effort to do a little research before you get started, and before you know it, you’ll be well on your way to working in this exciting, versatile field!

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