Guide to Contracting

What is Contracting?

Since the 1980s, contractors have been relied upon heavily within the UK workforce. Most UK businesses have come to recognise what an asset the contractor workforce can be, allowing organisations a level of flexibility not available within employment. The very best talent and the latest skills can be bought by organisations on an “as they need it” basis. Contractors are recruited to achieve a specific objective or complete a particular project for the client. They achieve it using their own skill set, knowledge and experience and then move on to the next client and project.

What are the benefits?

  • Contractors usually enjoy a higher rate of pay than permanent employees
  • Contractors tend to gain a really good insight into different companies’ cultures, processes, operations and structures
  • Working in many different companies gives contractors the ability to build up a varied, but specialist CV and to establish an extensive list of reference contacts
  • Changing contracts can often be far easier than changing jobs
  • A good contractor will become known within their own field for their excellent work and they may even find that their services become sought-after
  • The skills and experience amassed will be valuable to take from one project to the next in order to make each project they work on all the more successful.

What are the disadvantages?

  • Contractors are responsible for finding their own work and making sure that money keeps coming in. However, at Grovelands it is part of our promise to always do our best to help find candidates work. Once a contract is coming to the end, we will aim to provide options for alternative new contracts
  • Contractors have to manage their own paperwork and taxes if operating through a PSC
  • Contractors tend to travel where the work is and sometimes live in hotels during their working week
  • Contracting is highly target driven. Contractors need to deliver on challenging targets which can lead to long working hours.

What makes a successful contractor?

A successful contractor is able to adapt to different projects, quickly learning different systems and ways of working on each project. They must be able to cope well with changing environments and understanding new processes fast. Successful contractors are self-motivated and well organised with the ability to make new working relationships easily.

What to expect on a Contract:

DOs

  • Always act in a professional manner; you must treat contracting as any other job. Grovelands and the client expect the highest quality candidates who will represent both parties as ambassadors of the brand
  • Inform Grovelands and your team leader if you wish to take any holiday or are off sick
  • Work to a high standard – if you do well on one project and fulfil the contract your next project will be far easier to find
  • Enjoy the contract – you can learn valuable skills, work with great companies and achieve a fantastic career.

DON’Ts

  • Don’t discuss your day rate with other contractors or permanent members of staff – it is highly unprofessional, breaches the confidentiality obligations within your contract and will result in the immediate termination of your contract
  • Don’t expect to progress at the same rate as other associates. Any progression that occurs is at the discretion of our clients
  • You may find yourself on projects with highly experienced contractors who have been in the job for many years; do not expect the same day rate as them.

Contracting allows you to move from project to project, accumulating a variety of transferable skills and an understanding of different processes within different companies. These will be highly valuable for every project you work on. After just a few years your day rate could increase significantly. In many cases we work with great contractors time and time again and clients will go out of their way to request certain Associates from us. Being recognised as a strong contractor will help you secure work on a regular basis. Should you go back into permanent work the expertise amassed will be of worth to any future employer, who will be able to utilise the experience you have gained to their benefit.

Pre-Employment vetting

Due to the nature of contracting in the financial services, the level of pre-employment vetting is high. We ensure only the highest quality candidates are put forward for our clients’ roles. This not only involves rigorous interviewing and testing, but also incorporates a high standard of vetting prior to candidates starting a position.

What is pre-employment vetting?

It is a series of documentary evidence and security checks to prove that you are who you say you are, you have the right to work in the UK, do not have a poor credit or criminal record and have a positive employment/academic background.  You will need to satisfactorily complete our vetting process before starting an assignment with us.

What information will we need from you?

We will provide full details of the documents you will need to provide when you register with us, but the main information we will need is as follows:

  • Proof of ID
  • Proof of Right to Work
  • Proof of Residence
  • Employment History
  • Proof of Qualifications

We will need to see the originals of these documents so it is best if you can bring them along to your interview, otherwise you’ll need to post them to us via Recorded or Special Delivery.

We will also ask you to complete our online Vetting App and any client specific forms, as well as a CRB and credit check. Our online Vetting App is your way of registering with Grovelands. Completing the Vetting App should be a priority; failure to complete it makes the recruitment process far more difficult and can delay your application unnecessarily.

How long will the vetting process take?  

The Contract Compliance team will take you through the vetting process as swiftly as possible. If you bring all of the required vetting documents with you to your interview this will speed up the process and we should be able to complete your vetting, including the credit check, within a few days.

In short, the quicker you can get all your documents to us, the better!    

Who should you contact if you have a query about vetting?

You’ll be assigned a Contract Compliance Analyst who will be dealing with your vetting from start to finish. This Analyst will be your main point of contact during the on boarding process so feel free to contact them at any time.

What if you are new to contracting?

If you have never been a contractor before, you may find the following useful:

  • It’s a good idea to keep all your documents together in one place, as you will be asked for these each time you start a new contract
  • You will need to provide exact dates of residence and employment for the last 3-5 years (dependent on the specific client’s requirements) so if you can find out these dates in advance it will save you time later
  • You will need to make the decision whether to register with an umbrella company or contract through your own PSC.

Why do you need to operate through an umbrella or personal service company?

Grovelands contract with Suppliers (umbrella/PSC) to deliver a service via their Consultants to our Clients and do not temporarily employ workers.  We engage with these Suppliers strictly on a business to business basis under a Contract for Services. Therefore in order to contract through us, you must either be employed by an umbrella company or trading through your own PSC. For further clarity on how this contracting and payment process works, please see below.

Guide to contracting flow chart

What type of contract will you get?

You will be working on a Contract for Service. It is important to note that this is different from an employment contract. UK contractors are not employees of either the Agency or the End Client. You will have a contract for a specified period of time, a specific project to work on plus agreed rates of pay (usually a day rate). The contract will be between the Agency working on behalf of the End Client, and your own trading vehicle, usually either a PSC (limited) company or an umbrella company. It is also important to note that contractors are different to freelancers, sole traders, agency workers and temporary staff.

Contracting Entities:

Grovelands currently work with contractors whom supply their services either via an umbrella company or a Personal Services Company (PSC/Limited Company).

As an Agency, we are unable to help you make the decision which entity you wish to contract through, thus suggest you conduct independent research on which option suits you better or alternatively, you may wish to discuss this with an accountant or solicitor. If you are new to contracting, the following sites may be of use.

http://www.contractoruk.com/
http://www.contractorcalculator.co.uk/First_Timers.aspx
https://www.gov.uk/employment-status/overview
https://www.professionalpassport.com/Contractors/#

It is important that you make a well-informed decision regarding your choice of Umbrella Company or PSC, as you will not be able to switch from one contracting entity to another either during your contract or upon an extension offer. Once you have made a decision, please advise your consultant of your decision.

Upon receipt of this decision, Grovelands will need to run some compliance checks to ensure this Company can adhere to our terms of business. You will be kept up to date with the progress of these checks and delivered confirmation as to the result of our audit and whether we can proceed with your chosen Company.

 

IR35

IR35 is UK tax legislation that was introduced by HMRC on 6th April 2000, with the objective of preventing disguised employment and eliminating tax avoidance schemes.

Who does it affect?

IR35 only affects contractors whom are operating via their own Personal Services Company (limited company). If a limited company does not satisfy HMRC’s definition of ‘self-employment’ they will be categorized as caught inside of scope of IR35 thus will have to pay the same tax and NI contributions as a permanent employee would. Those limited company contractors whom are genuinely self-employed are entitled to pay less tax and NI contributions.

What if you operate under an umbrella company?  

If you’re employed by an umbrella company, the IR35 rules do not apply to you. Umbrella company contractors are not affected by this legislation as they cannot be viewed as disguised employees as they are employees of their umbrella company, whom pays on their behalf the same tax and NI as a permanent employee would.

How do I determine my IR35 status?

If you answer yes to the following questions, it is likely you will be deemed a ‘disguised employee’ and will therefore fall inside of IR35:

  • Can someone tell you at any time what to do, where to carry out the work or when and how to do it?
  • Will you work a set amount of hours e.g. from 9-5, 5 days a week?
  • Can someone move you from task to task?
  • Are you paid by the hour, week or month?
  • Will you receive overtime pay or bonus payments?

However:

If your answer was no to the majority of the above, but yes to the following, it is likely you will be considered genuinely self employed and subsequently your contract will fall outside of IR35:

  • Could you provide a replacement contractor should you become unavailable to complete the work specified?
  • Do you risk your own money?
  • Do you provide the main items of equipment you need to do your job, not just the small tools that many employees provide for themselves?
  • Do you agree to do a job for a fixed price regardless of how long the job may take?

What if you get your IR35 status wrong?

Contractors who are aware that they are operating inside of IR35 but choose to conceal it in order to pay less tax and NI, will be liable to pay severe penalty fees; should a HMRC investigation into this result in a contrary finding.

IR35 legislation is complex and we would advise all limited company contractors to seek independent advice should they be unsure of their status.

 

How can you find out more?

 

Code of Conduct

It is of the highest importance that as an ambassador of Grovelands, you conduct yourself with absolute professionalism at all times while on site. This will not only ensure the continuance of our relationship with you, but also place you in the best possible position with the client.

  1. To be aware of and adhere to all client and site regulations and requirements, working standards and procedures
  1. To dress in a manner appropriate to the site
  1. To be courteous at all times to client’s employees, suppliers and customers
  1. To exhibit professionalism through punctuality, time-keeping, commitment and general conduct
  1. To make the client aware of any problems or difficulties that present themselves regarding work. If a speedy and satisfactory resolution is not possible, please notify your Relationship Management Consultant
  1. If you are unable to attend the client site for any reason, make absolutely sure that this is communicated promptly to a Grovelands representative
  1. When you are proposing to take leave ensure that this is agreed with the client well in advance and that this takes into account the work schedule under the assignment.

Contact Us

If you’re interested in contracting through Grovelands, or would like any further information, please don’t hesitate to get in touch with one of the team who will be happy to help.

Main Office:

5th Floor Tower Point
44 North Road
Brighton
BN1 1YR

T: 01273 651 500
F: 01273 371 067
contactus@grovelands.co.uk

www.grovelands.co.uk

 

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