I have been contracting for about 8 years now and yes, it is quite easy to get started in the UK. You can find your own contracts or most likely you'll need to send your CV to head-hunters looking for contractors. Once you get a contract, you've got two options: a) setup a limited company to invoice your client/agency. Many accountants in the market that can help you with that. e.g http://www.sjdaccountancy.com/ or b) go with an umbrella company e.g. http://www.tarpon-uk.com
Agree except for recommending SJD. They are a good accountancy firm but when I was with them they would only do my accounts through a really horrid excel spreadsheet. This time round I've gone with http://www.nimblejackaccounting.co.uk/ who bundle an account with freeagent (which is probably the best contractor accounting package out there) AND the set up of your limited company in their monthly fee.
If you're going to go contracting don't bother with an umbrella company! It's absolutely ridiculous how tax efficient you can be as a limited company (especially if you can set up you significant other as a director). You're looking at just under £40k per director completely free of personal tax and NI if you set it up right. You still have to pay corporation tax and some VAT on that amount and there's all the overhead of managing the company, but it's seriously worth it - especially with a good accountant!
Got to agree, umbrellas are a waste of money. Freeagent is really good (one or two small annoyances, but nothing that matters). They have a list of partner accountants who are freeagent friendly; I went for a local accountant who is a one person shop. A contracting friend of mine suggested local over chain. I met with the accountant and I'm really happy with her advice and charging structure; she help me organise starting the business reg for VAT, CORP tax and do some cashflow projections to minimise tax etc. I don't pay anything to her month to month but she is available to deal with any ad-hoc queries and will do the tax return at the end of the year. Freeagent allows my wife to do the bookkeeping, payroll and invoicing without the monthly involvement of an accountannt, then the accountant can get involved at the year end.
(The idea is that if the company bills 100,000 pounds
it pays corp tax of 20,000. Then the director can withdraw the profit of 80k as a dividend. Since a tax has already been paid on the 100k the 80k is free of income tax. However income tax is charged at two levels in the uk (25% and 40%). The govt says that the first level of 25% has already been paid (by corp tax at 20%). The 40% only kicks in at 43,000 a year - so you can as a director withdraw 43,000 as dividend and not pay "extra" tax on personal income.
The parent is suggesting your spouse can be a director and do the same, effectively making a 80k pa net household income on 100k revenue. (And if your are in a stable threesome it's even better :-)
If it is legal send me your accountants number - my mail is in the profile!
Perfectly legal! I get most of my tax info from taxcafe.co.uk. The best book they sell is called "using a company to save money".
By the way we met at one of the find a tech job meet ups recently. I'm interested in your OSS in government idea. How about you drop me a line next time you're in the city? I'm ben at perurbis.com (no website yet)
Agree about the umbrella company! Should be your last option! But something worth considering if you are not 100% sure about contracting and whether you want to do it for long term.
I'm with SJD and yes, they still do have that horrid excel spreadsheet!
Poor you... Seriously there's no competition in my mind: freeagent compared to that spreadsheet is like being fed ferrero rocher by Angelina Jolie at the ambassadors ball verses having faeces flung at you by drunk chimps at the zoo!
I'd like to highly recommend crunch.co.uk for UK contractors - they're a Brighton-based startup whose product is something like a cross between freeagent and a traditional accountant.
Disclaimer: They do also have an referral scheme, feel free to nudge me for my token if you're thinking of signing up (or don't, I'd still recommend them - referral voucher or not:)
I use Nixon Williams at the mo, who are more expensive but do seem to handle everything (i.e. tell me exactly what/when tax is due, things need to be signed etc etc)
I used to contract in the UK a few years ago (since emigrated), and getting started for me was really as simple as sticking a CV on a few of the job boards and making sure it emphasised I was only looking for contract work. If your skills/experience are a match for open contracts the headhunters will find you.
I just started looking for contracts on job boards (notably jobsite.co.uk, which may not be the best but has worked for me). When applying for them I ticked the box to allow the website to publish my CV to any/all agents.
I then spent about two weeks telling people that no, I'm not interested in a perm role, and got work at about the end of week 3. (for reference I'm a server-side C/C++ programmer with an interest in crypto and about a decade's experience).
That's when I registered a company, bought domain names, got accountants (nixon williams, they specialise in this, seem to be ok so far) who handled tax registration etc etc.
-- edit --
happy to answer any further questions. I'm only about a year in and on my second contract.
Head hunter. It's really, really easy. Remember, they don't make money unless you're making money. Just be careful that they don't screw you on the rate (you should always try to find out from the company what they're paying for you so you can see what the agency is actually taking because they will lie about it).
They want to be called agent, but "pimp" or "head hunter" is closer to what they do. The parallel with a Hollywood/sports agent doesn't really exist, and to be fair we wouldn't realistically want to pay enough to justify such a model.
They are just CV movers but they often know key individuals within different companies and even provide kick backs. As slimy as they can be at times they have connections that a sterile CV in a pile of sterile CVs just can't have.