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Becoming a contractor – a first time contractor’s guide

Are you new to contracting? If so this guide will help you understand the basics of how contracting works, the options available to you for getting paid and assistance to get you up and running.

Whether you are becoming a contractor for a change of lifestyle or by circumstance, we can help set you up for success so you can enjoy a hassle and stress-free career as a contractor.

How does contracting work?

Contracting can be a lucrative and suitable career path for many skilled professionals of all industries, such as IT, engineering, finance, marketing, social work, and more.

Contractors typically do not get paid by their end-clients, aka the company providing them with work. Therefore as a contractor, you will have to arrange your own way of getting paid unless you are on your recruitment agency’s payroll.

There are three other options to get paid: sole trader, limited company and umbrella company. Limited company and umbrella company are the two most common options that contractors choose, as many clients and agencies are uncomfortable working with sole traders due to the associated liability.

Whether you operate through your own limited company or work through an umbrella company as its employee depends on your contract, working circumstances and your preferences.

Find out more about these options on our Limited or Umbrella page.

Specialist online contractor accountancy

Becoming a contractor can feel daunting sometimes. Between understanding the different payroll options available to you, the complexities of IR35 legislation, and the financial aspects of it all, it can feel overwhelming.

That’s why you need a specialist contractor accountant on hand who can understand all this for you, and guide you through all the legislation and payroll information from the start of your contract until the end.

Plus, you can have access to all the financials for your company at the touch of your fingertips with the help of an industry-leading accountancy software – FreeAgent, which is used by thousands of new contractors all over the UK.

This simple, modern approach to contractor accountancy has saved thousands of UK contractors time and money by providing them with the software they need to complete their accounts without any of the hassle, and all of the support they need.

Speak to Bluebird Accountancy and we can answer any questions you may have about contracting, accountancy, legislation and more. We’re here to help – simply call us on 0808 301 2389 or request a callback.

For £95 +VAT per month, you can have all of the following:

  • Company formation, registration for taxes, business bank account set up
  • 24/7 access to FreeAgent mobile-friendly software
  • No joining or leaving fees
  • Use of registered office address
  • Your own Account Manager with unlimited phone and email support
  • Free Personal Tax Return for a director and one employee
  • Invoicing tools and payroll
  • Annual accounts completed within 3 months
  • Completion of Confirmation Statement
  • Quarterly VAT Returns
  • Discounts on business insurance
  • 10% discount if you pay for 12 months upfront

Becoming a contractor has never been so easy. Speak to us today to find out more.

Terms and conditions apply. For a full list of what’s included in our best-selling package, please click here.

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If you were to start contracting, do you know how much you could take home? Discover your earning potential with our calculator.

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Contractor Calculator

Are you curious how much money you could be taking home as a contractor using Bluebird Accountancy? Have a quick go on our contractor calculator and discover your earning potential.


Our blog is full of useful articles written specifically for contractors. Take a look to keep up-to-date with the latest legislation and to get free and helpful advice from the experts.

Limited v Umbrella

Are you unsure whether to start your own limited company or get paid via an umbrella company? Have a look at the pros and cons of each and make an informed decision about your payroll.


With the support of a Bluebird Accountant, FreeAgent will help you run your business efficiently and on the go. All of our clients will have access to FreeAgent – at no additional cost.

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Interested in our best-selling package?Click Here