There is a severe skills shortage in the UK economy, which foreign nationals might exploit as a source of employment as foreign contractors.
However, several regulations and requirements must be followed to be recognized as a legitimate contractor in the United Kingdom.
If an individual is not a British national, Irish citizen, settled, pre-settled, or holding indefinite leave to remain, they will need a visa for a contract job in the UK!
In addition, you must determine what kind of visa is appropriate for your job before you can proceed with your application. Most contractors will consider a Skilled Worker Visa, which requires a UK job offer.
From deciding on a company structure to setting up your profile on different platforms, we’ll walk through the steps you must consider to land a contract job opportunity in the UK.
What is a Contractor?
A contractor is a person who temporarily provides services to clients as a self-employed entity or through a limited corporation. Unlike permanent workers, contractors work on particular projects or tasks for a set amount of time.
They frequently have more authority over their clients, projects, and work schedules. Skilled worker visas will cover most foreign contractors.
The conditions for this type of visa are as follows:
- The contractor must be employed by a UK employer approved by the Home Office.
- The contractor will need a “certificate of sponsorship” from the UK employer, which includes details on the role they have been offered in the UK.
- For a task on the list of “eligible occupations,” the contractor is necessary.
- A minimum wage is required for the contractor, depending on the kind of work they provide.
- Contractors can only apply for a visa once they have received confirmation of a job offer.
- The ability to comprehend, write, and read in English must be proven.
The Steps to Land a Contract Job in the UK
Becoming a contractor in the UK from a foreign country is complicated, so follow these steps to make it easier.
Acquire the Right to Work
Since Brexit, European Union citizens do not have the same freedom of movement in the United Kingdom. However, some individuals still have the right to work in the country automatically. These include the following:
- Irish and British citizens who have dual citizenship.
- Those who gained pre-settled or settled status in the UK before the Brexit deadline.
- Those who have a family permit from the EU Settlement Scheme.
- Those who have indefinite leave to remain or enter the country, including those who have the right of abode.
Those not fitting into one of the categories above must apply for a work permit and employment visa. Self-employed individuals must apply on their behalf.
While those who are employed must have their employer do so. The approval process for documents can take up to three months, so the application needs to be finished well in advance.
As previously said, individuals who work for themselves must weigh several possibilities.
Understand the UK Tax and Become Compliant Legally
In the UK, tax matters can be exceedingly complicated, especially for foreign contractors. Changes to the IR35 off-payroll tax residence laws were made in 2021, and they now apply to the private sector.
As a result, more administration is required for a contractor to comply with the law. This implies that many contractors under IR35 will have to pay UK taxes at the same rate as employees.
A contractor’s status as a legitimate complainant is contingent upon several circumstances. These variables may include the tools utilized, the contractor’s workspace, methods, schedule, and the contractor’s rapport with the final customer.
An incorrect status assessment can lead to a hefty fine and a drawn-out legal battle. Many contractors use payroll partners or umbrella firms to ensure their taxes, national insurance contributions (NICs), and pensions are paid on time.
Other popular options for managing tax matters are accountants and tax advisors.
Jobs
In the United Kingdom, contractors might work for the government or the private sector. While most countries have a skills gap, the UK is particularly affected, with a scarcity of specialists in several areas.
Consequently, an occupation shortage list displays the many career pathways that would qualify an employee for the Skilled Worker Visa.
These occupations include the following:
- Health Services such as doctors, nurses, healthcare assistants, etc.
- Engineering includes electronics, civil engineering, design, quality control, chemical engineering, etc.
- Social Care includes senior care workers, domiciliary care managers, social workers, etc.
- IT and Technology include business analysts, programmers, software developers, and web designers.
To apply for a contract role in the UK, a self-employed professional can contact a company directly, register with a recruitment agency, and more. It is also helpful to search job boards such as Indeed.co.uk.
Applications
After deciding what kind of visa to apply for to enter the UK, a person must gather the supporting documentation required to apply for both a passport and a self-employed work permit.
A UK contractor’s working accounts should also be opened in a UK bank account, and you should consult a tax advisor or accountant.
After obtaining the required documentation and comprehending the ins and outs of contracting from abroad, submit your application and make the necessary payment (which varies based on the type of visa you select).
Depending on the kind of visa you apply for, you will have to wait a specific time before finding out the outcome and receiving your work permit and visa.
Using an Umbrella Company in the UK
It’s complicated and vital to pay close attention to taxes in the UK while working overseas. In many countries, taxes are state-specific, and where you live might affect your tax liability.
Although many foreign contractors employ umbrella businesses specializing in international contracts, an accountant or tax counsel might be helpful.
These businesses hire contractors, help with taxes, locate jobs, and offer payroll services. By handling tax matters more efficiently, umbrella firms free up your time so you may concentrate on job chances outside of the UK.
You forfeit the tax advantages of self-employment, such as the ability to file for tax relief and become an official business employee.
Reasons to Consider a Contract Job in the UK
Work Flexibility
Contracting offers greater freedom than typical employment. Contractors often have more control over their work schedules, projects, and contract lengths.
This flexibility may appeal to people wanting variety and career independence.
Increased Pay
You want to increase your pay by switching from permanent to interim/ contractor roles. Contractors typically earn higher hourly rates than permanent employees.
Contracting can be very lucrative
You’ll need to be comfortable with a certain level of risk (short notice periods), increased monthly admin (as a Limited Company), and fewer benefits than being an employee (paid leave, sick days).
However, you’ll earn more, gain greater flexibility, and grow your consulting business.
Variety of Projects
Through contracting, people can collaborate with different clients on various projects. This diversity can foster networking and skill development while also offering intellectual stimulation.
By establishing a Limited Company, you can work on several projects a few days a week and quickly grow your clientele as a contractor.
As a current PAYE company employee, you can still set this up, which can be a terrific first step toward starting your own business.
Work-life Balance
Some individuals choose a contract job to achieve a better work-life balance.
Contracting can offer the flexibility to take breaks between contracts or to work remotely, enabling individuals to manage their personal and professional commitments better.
Skill Development
Contracting can provide opportunities for skill development and career advancement.
Working on diverse projects with different clients can broaden one’s skill set and experience, making contractors more attractive candidates for future roles.
Market Demand
Specific industries or sectors may have a high demand for contractors due to particular skills shortages or the need for temporary expertise on projects.
This demand can create favorable conditions for individuals considering contracting.
Independence
Because contracting enables them to function as independent professionals and entrepreneurs, some people find it appealing.
They enjoy running their companies, promoting their offerings, and cultivating clientele.
Tax Efficiency
Contracting has several tax benefits, such as increased wage retention, tax deductions for business expenses, and reduced dividend tax rates.
There are flexible pension contribution options, capital gains on tax planning opportunities, and techniques to reduce overall tax obligations.
Final Thought
Starting a contract job in the UK may be both tough and lucrative. You can succeed by confidently understanding the procedure, following the steps above, and utilizing contractor accountants’ experience.
Contracting presents unrivaled chances for development, independence, and financial success. So go forth and seize the beautiful opportunities of working as a contractor in the United Kingdom!