Ditching permanent employment in favour of being your own boss is a growing trend in the UK. A study in 2017 showed that around 4.8 million individuals have taken the leap to self-employment, and this figure is steadily rising.
Why wouldn’t you make this move? With plenty of benefits up for grabs, it’s an option to consider. To help you on your journey, we’ve created a contractor starter pack containing everything you need to get started.
Preparing your budget
Being aware of your budget may sound obvious at first, but how many times have you heard ‘I was over budget’?
To avoid this, it’s worth listing the costs you will incur whilst setting up your limited company. These include but are not limited to the following: equipment, marketing and advertising, home office, travel and accountancy fees.
Even having an approximate cost in mind is a good place to start, you can adjust your figures accordingly later.
A laptop or computer is a common feature in many homes. Although you could use the same one for your career, it can then be more difficult to have a good work-life balance.
If you would like to start afresh and purchase a new laptop for your new venture, then there is good news headed your way. If you plan to use this to assist you with your work, then you can claim a portion of this back as a business expense. For example, if you only work on your laptop for 50% of the time, you can only claim 50% of the total cost as an expense.
A storage system
Is your paperwork towering over you? Do you find yourself adding things to the pile? If you are one of those people who doesn’t enjoy organising your paperwork, then having suitable storage is essential. Whether it’s receipts, invoices, project documents or general paperwork, ensuring everything is in the right places makes things so much simpler when trying to find it a few months down the line.
Box files are a useful way of storing everything together in one place; these are readily available online and in many stationery retailers. If you’re working on several contracts, then you can even create a dedicated folder for each one.
It’s a great idea to have a storage system in place, but you must use it on a regular basis. It’s tempting to think ‘I’ll sort it another day’, – especially after a busy day at work. Why not set aside a few minutes each day to make sure the paperwork doesn’t build up too quickly?
We’re here to help prevent the paperwork from towering over you. Our accountancy portal, Vantage, allows you to keep everything in one place whilst keeping your paperwork to a minimum.
Insurance is a perfect security blanket. If you’ve damaged your beloved iPhone, insurance will have your back. If your home gets flooded, your insurance is there for you. But who’s there to look after you if you become sick whilst self-employed? Don’t panic, you can get the relevant protection for yourself should anything go wrong.
There’s always an element of risk when working for your end client, so your level of cover must be appropriate for situations you could find yourself in. There are many types of insurance to consider as a contractor, we’ve selected two of the most important:
- Professional indemnity insurance: Sometimes referred to as professional liability insurance or simply indemnity insurance, this helps to protect you against claims made by clients about work undertaken for them
- Private healthcare insurance: This opens the doors to a number of eligible private treatments. From seeing a specialist to avoiding a lengthy waiting list, private healthcare insurance provides you with peace of mind
There’s plenty of choice out there, with many providers now offering tailored insurance packages for contractors. If you’re looking for somewhere to start, our guide to insurance for contractors contains the essential information. If you choose us as your contractor accountant, we offer a discount on insurance packages with Hiscox.
In the early days of running your limited company, it can be difficult to gather enough contacts and connections to create your very own network. Luckily, there are plenty of ways of doing this that don’t require too much effort and time on your end.
One way in which you can grow your network is through LinkedIn. You’ve probably heard of this, but how does it benefit you when contracting? LinkedIn is a social network for professionals who are looking to boost their careers by showing off things they have achieved and companies they have worked for. Think of it as your virtual CV and business card and use it like your traditional networking event to meet new people in business.
Speaking of traditional networking, there are still events happening all over the place that don’t need a dial in code or a screen share. Networking events take place all year round, it’s worth having a look around to see what’s available. We would recommend Eventbrite as somewhere to start as you can search by location, allowing you to find an event that’s closer to home.
Your contractor accountant
We’ve got another useful list that’s got plenty of valuable tips and tricks to guide you through the first steps of your journey. From creating your limited company logo to deciding your working hours, we’ve covered it all.
If you’re new to the world of contracting, it can seem overwhelming at times. As your accounting partner, we’re here to help you navigate through the legislative ocean. We understand how contractors work and provide excellent support to all our clients (check out our reviews). If you would like to find out more about Nixon Williams and the services we provide, don’t hesitate to contact us.