The UK's leading contractor site. Trusted by over 100,000 monthly visitors

Finances and Getting Paid

This is step 8 of our guide Contracting in the UK.

To get paid you will need to decide on a payment structure to use: Limited company or umbrella.

Both are quick and easy to do, and you don't need to do this until you have signed your first contract.

You can either use an umbrella company or start your own limited company.

IR35 is a key factor when deciding between the two options. Since the Managed Service Company Legislation was introduced in April 2007, all umbrellas are forced to operate under PAYE schemes, which means you get taxed as though you are caught by IR35 even if you are not. For contractors outside IR35 who are planning on contracting for the long term a limited company is a much more tax efficient option.

We provide advice about choosing an umbrella company. When researching the market for an umbrella company you can use our umbrella checklist.

If you choose the limited company option then you will need to choose an accountant.

For more information see our dedicated sections on limited companies and umbrella companies.

Once you've got your payments structure in place you will need to complete timesheets and raise invoices.


Step 9: Timesheets, invoices and payments