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Whether it’s a move away from PAYE or progressing on from Umbrella (despite the admin), a good recruitment agency can help make the process as straightforward as possible. Our Managing Director Nathan Connolly provides his inside tips and advice for a painless setup!

Everyone has a horror story to tell of when they haven’t returned a letter or HMRC document. I'm yet to work with a contractor, who has found the process a straightforward one. So to make it as simple as possible for anyone thinking of foing it alone, here’s my step by step…

Quick Check Guide

  • Get a name -
  • Get a domain & get business email -
  • Setup the company - ask a contract consultant who we can get you the best turnaround and discount with! 0203 3974565
  • Get a bank account -
  • Get insurance (£1m Public Liability, £1m Professional Indemnity, £10m Employers Liability) -

The Name

First things first, pick a name and domain and check it’s available, but don’t take all day about it! Sadly, in the past we’ve known contractors spend so long working on a company name that they’ve completely missed the boat and the client has gone elsewhere.

The Email Address

The first thing you need is a professional email address as you will want to keep your communication with your future clients off their email server. A is one of the first checks on the IR35 list (which we will cover in more detail later on). G Suite (Google's business version) lets you have a business email, document storage and all the rest you need for just £3.99 a month.

Company Setup

Often when you go contract, people are shocked by the speed at which the recruitment process moves and whilst of course you can use a family friend or high street accountant to sort things out for you, we’ve rarely seen it go smoothly and certainly never as quick as it could. Here at Consortia we have a large volume of contractors working with us across multiple markets and so often get discounted, cheaper rates so don’t hesitate to get in touch with one of our consultants for more info. 

VAT and Flat Rate Scheme (FRS) VAT

If your daily rate exceeds £350 per day, then expect to become VAT registered as during the tax year you will go through the VAT ceiling (known as threshold) of £85,000. If you think you’ll come close to breaking the ceiling, a good accountant will recommend becoming VAT registered at the beginning of the process and 99% of our contractors are setup from day one. Whilst you can invoice at a later stage, when going VAT registered, this is an extremely tiresome process for yourself and the agency and you’ll almost certainly incur additional costs from your accountant.

In the Easter 2017 budget, Philip Hammond announced charges to the FRS (flat rate scheme) raising it to 16.5% and cancelling a lot of the margin so for many, it maybe worth sticking to 20% returns. The flat rate scheme does change depending on which market you are in but for IT/digital contractors its currently at 16.5%.

Choosing the Right Bank Account

“Can I be paid into my personal account?” This is a controversial point and from experience we know that many accountants like to record a partner bank for the referral fees, but unfortunately the answer is no.

As part of HMRC’s know your customer policy, often the fastest route to creating a new business account is with your current provider. For the most part a digital account will be all you need to set up and this can always be moved further down the line for little cost and low admin. The most important thing is making sure you paid into your limited company account as soon as possible.

Choosing the Right Insurance

For this you will need; Professional Indemnity Insurance, Public Liability and Employers Liability.

Firstly and most importantly, insurance is one of the first indicators of an IR35 compliant scenario. Secondly, the agency will have an agreement with the client that all subcontractors (you) will have insurance to a set level which must be mirrored in your contract.

The level of insurance you need will depend on the end client and the project you are going into but for the most part, willmore than likely be Professional Indemnity Insurance at £1m, Public Liability at £1m and Employers Liability at £10m.


The invoice doesn’t need to be handled by your accountant or a clever app. Microsoft Excel or Word will more than do the trick; it’s what you put in it that matters. Supplying not enough or the wrong information is still the most regular reason people don’t get paid on time. Your invoice should only contain the following;

  • Company name and Company number
  • Company address (you may have used your accountants – check first)
  • VAT registration number (if VAT registered)
  • Invoice number
  • Days worked
  • Rate
  • VAT (if applicable)
  • Total owed

One area of vital importance is the invoice number. From experience we’ve found this to be a big issue for payroll teams! A good tip is to start with the agency name, followed by the week number (Consortia.42). This quick and easy formula has certainly helped us to stay on track over the years!

If you’d like more information, advice or support on the ins and outs of going contract, get in touch with Nathan on or you're on the hunt for your next contract role, please send your cv and accompanying note to

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