Becoming a contractor and keeping your full time employment perks

As a self-employed contractor you may not be entitled to the same benefits as those who are in full-time employment. However, by using one of the many UK umbrella companies, you can often enjoy the best of both worlds.

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Essentially an umbrella company will act as your new employer, therefore the benefits you received as a full-time worker will be dealt with by the umbrella company.

It also means somebody else will take care of your admin and paperwork, giving you more time to focus on your current project.


Due to the government’s new auto-enrolment scheme, contractors have different options considering a pension plan. If you choose an umbrella company which is already compliant with auto-enrolment, you will be placed into their current pension plan. Once you are in you can choose to opt out.

Contractors who stay enrolled in their umbrella companies scheme can benefit from contributions from their employer. If you opt out you are responsible for your own pension contributions.

An umbrella company will provide you with a pension scheme should you choose to pay into one.

Pay and tax

One of the most attractive prospects that bring people to the contracting world is the ability to earn higher wages. A key reason for this is due to the taxes contractors pay. They are generally less than full-time employees and contractors can claim back some of their expenses.

Umbrella companies will take care of chasing up clients for your pay. All you have to do is submit your timesheet to your umbrella and they will take care of the rest for you.

An umbrella company will take care of you tax deductions and National Insurance contributions. This will eliminate the hassle of tax calculations for the contractor.

Contractors using an umbrella company may also benefit from expense allowances. The company will usually allow a contractor a certain amount of claimable expenses relating to areas such as travel and accommodation.

Holiday Pay

Just because you have made the choice to contract does not mean you will lose money when taking holiday. This is a popular myth within the industry. When contracting you will generally be expected to finish the contract you have started on. This means you should take holidays into account before taking on a contract.

However, for contractors working through an umbrella company can enjoy similar holiday perks to those who work full-time. For example, it is common for an umbrella company to offer 28 days of paid holiday a year, similar to that of a full-time employee.


Networking is essentially making a list of all your professional and business contacts. This list can be used to help you generate work and also to spread your name further afield. Every contact on your list is likely to have a business network of their own, the benefits of a strong network speak for themselves.

As a contractor you will constantly change clients and places of work. It is important to remember that by impressing at your current contract you may lead to work from a contact of theirs.

Once you have worked for a client , they are more likely to consider you for their next project. They may even recommend you to an associate who is looking for a similar service.


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