Handling Your First Contract

You've Got A Contract

Congratulations, but what happens now?

As an individual contractor you are not welcome at any end-client's site. Both your recruitment agency and end-client requires you to be working as a ‘limited company'.

• A ‘limited company' has different legal rights compared to an ‘individual' and, due to complicated employment laws, end-clients will only deal with limited companies and not individuals.

Don't worry, though. You can achieve ‘limited company' status with the minimum fuss and at a low cost.

Do you want Extra Admin?

Ten years ago a contractor had the hassles of setting up and running their own limited company. This meant you had to keep on top of a load of red-tape and paperwork, things like:

1. Registration at Companies House
2. Annual Returns
3. Quarterly VAT payments
4. Monthly PAYE calculations
5. Dealing with HMRC
6. Corporation tax return
7. Memorandum of Association
8. Articles of Association
9. Form 10 - Provides Directors' and Company Secretary's Names & Addresses
10. Form 12 - States that the Company complies with the terms of the Companies Act.

All this, and a lot more, meant that many people decided that contracting was just too much hassle.

Biros Vs Fountain Pens

The majority of today's contractors feel exactly the same. They don't want to come home to face hours in front of the PC doing boring administration. Importantly, contractors aren't accountants and the last thing they want to do is to have to learn a whole new profession.

What has been the answer? It's called an ‘umbrella company'. An umbrella company is simply a ready-made ready-to-go limited company designed specifically for freelance contractors, interims and temporary workers.

The fast-food of accounting, or like using a biro rather than a fountain pen.

Done Deal

An umbrella company will complete all your paperwork, deal with HMRC on your behalf, sign contracts with your recruitment agency and ensure you get paid as quickly as possible.

It almost sounds too good to be true but there are umbrella companies, set up specifically to help contractors, who would be delighted to hear from you.

• In return for a modest monthly fee your umbrella company will do all the administration and paperwork necessary, leaving you free to concentrate on your contract.