If you are thinking about becoming an IT contractor, but don’t know where to start, our guide to getting started in the contracting world should give you some useful pointers.
We’ve been writing about contracting for over twenty years now, so the tips and ideas below are based on our own experiences.
1. Is life as a contractor right for you?
Ask most contractors if they regret leaving the world of permanent work behind – and most will say a resounding ‘no’.
If you decide to take the plunge, there are many great things about being a contractor – the freedom, the chance to experience new things, and better financial rewards.
On the flip side, you need to be self-starter, think more like a business person, and be able to adapt when the going gets tough.
The scarcity of skilled contractors for a given role.
Your own skills and business experience.
The location of the contract role.
How much commission the recruiter makes.
3. Get used to the changing contract market
The overall demand for IT contractors sank significantly during the recession in 2007/8 and for several years afterwards.
The market rebounded strongly from 2012/13 onwards, and contracting was in a healthy state in the late 2010s.
However, Brexit and general economic decline have dampened the market.
The April 2021 ‘Off Payroll’ (IR35) rules have also made life more complicated for both recruiters and contractors.
At the start of 2025, the economic outlook looks decidedly mixed. Will the drop in permanent job hires benefit contractors?
As a contractor, you will become used to dealing with the boom and bust cycle, and dealing with events which inevitably impact the market every few years.
4. Get ready to quit your current job
The nature of the contracting market means that clients often want contractors to start right away or within a few weeks at most.
This means, as a permie, you must give notice to your current employer before accepting a contract role.
You can either give notice and wait until the notice period has expired before seeking work or, more likely, start to apply for roles while serving your notice period.
Your current employer may have a flexible approach to your decision to leave, allowing you to leave early. In other cases, you may have to ‘do your time’.
Take time to create a compelling LinkedIn resume and keep in touch with former colleagues. They may have access to juicy roles that never even make it to recruitment agents.
Once you pass the interview stage, it is time to negotiate your contract rate, and discuss other matters related to the actual role.
6. Read up on IR35 (Off Payroll)
IR35 is a piece of legislation which has a massive impact on the contracting world. The IR35 rules apply if you work via a limited company, but carry out your contract work in the same way as a normal ’employee’.
In other words, if you are under the control and supervision of your client, and don’t show any signs of being in business in your own account, the IR35 rules may apply.
For this reason, it is worth contacting an IR35 specialist to make sure that the wording of your contracts and working conditions keep you outside the legislation.
IR35 is one topic you must read up on before starting out as a contractor.
7. How are you going to trade?
Another fundamental step to take before you start up is to decide which trading structure to use.
