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Thinking about Contracting - What is a contract job?
 

Every year Jonathan Lee successfully places hundreds of professionals in new contracts within automotive, aerospace, defence and many more growing industries giving flexible working arrangements for both our candidates and our clients.

At Jonathan Lee we understand that there will be questions and apprehensions for those people who are contemplating contracting as their chosen method of working.

We have dedicated staff to assist our consultants in arranging contracts for our candidates in payroll, contractor welfare and day to day administration.

Below are answers to a few frequently asked questions that may help you to decide if contracting is right for you.

What are the benefits of contracting?

Contracting offers businesses the facility to engage resource that may be specialised in a particular skill set, either for a specific project or for a temporary increase in resource requirement. It allows variety for candidates to experience different sectors and to accrue new skills and learn about new working environments.

What are the risks of contracting?

Contracts by definition are for a temporary period which varies depending on any number of factors. There is always a notice period built in to the contract agreement to allow the candidate an opportunity to look for their next appointment, and for the client to be made aware that the resource is soon to be released. This may serve as a prompt for contract extensions in many cases.

What are the differences between contracting and permanent employment?

Permanent employees paid through the ‘pay as you earn’ system, (or PAYE), have their national insurance contributions and holiday entitlement accrual paid by their employer. As contractors are not part of the payroll system and an outsourced resource they are not paid in the same way. However, with the contractors hourly or daily rate will be an allowance of 12.07% for holiday pay accrual and 12.8% for national insurance contributions. The latter will still need to be paid to the HMRC through either the contractors umbrella service provider, or through their own limited company.

How do I get paid?

Contractors are generally required to complete a timesheet that should be signed by an authorised signatory within the client organisation; this is usually the line manager. The signature validates acceptance of hours worked by the contractor and authorises Jonathan Lee Recruitment to make payment for the services provided by the contractor. The signed timesheet acts as an invoice for payment and should be faxed to both Jonathan Lee and the umbrella service provider unless the contractor has their own limited company.

We provide timesheet templates on our website for our contractors to print off as they require them. Some umbrella service providers also have the facility to text hours worked through to them, though a signed timesheet is always required.

Contractors have the choice to be paid on a weekly, fortnightly or monthly basis. Jonathan Lee Recruitment has a dedicated payroll team dedicated ensuring that our contractors are paid correctly and on time.



What are the methods of employment - Umbrella or Limited Company?

An Umbrella Service solution is a ‘pay as you go’ method to addressing payment administration on contract. An Umbrella Service provides accountancy services to the individual incurring a weekly charge that is in turn off settable against tax obligations. If you plan to use contracting as a short term method of employment this method avoids the initial costs incurred if opening your own limited company.

Contractors who choose this method of working as a long term solution may find financial benefit in establishing their own Limited Company, though there are set up costs associated with this.

For greater clarity on which solution is best for you, please call one of consultants to discuss.



Which umbrella service provider should I appoint?

We are currently working on a Preferred Suppliers List of umbrella service providers and will publish this information shortly


What expenses can a contractor claim for?

You can claim expenses that are wholly necessary and exclusively for the purpose of carrying out your contract. Some examples are;
  • Business travel
  • Subsistence (food and drink
  • Accommodation whilst on business
  • Tools to complete the job
  • Mobile phone usage (for business calls only)
(this is by no means a comprehensive list)


For more information, please visit our Working Contractors Area

What will Jonathan Lee do for me?

Jonathan Lee Recruitments contractor team provides an in-house payroll service provision, a team of consultants who will actively search for your next contract role and a contractor welfare officer to act as an interface between yourself and the client to chase any contract extensions or notice alerts.


What guidance is provided if I am unsure of anything?

We have regional Contractor Welfare Support Officers and our Recruitment Consultant team as guiding hands.

If your contract is handled by our Stourbridge office:
Samantha Lowe on 01384 446189 (samantha.lowe@jonlee.co.uk)

If your contract is handled by our Basildon office:
Sarah Frost 01268 889261 (sarah.frost@jonlee.co.uk)

If your contract is handled by our Leicester or Wakefield offices:
Jeanette Hopkins 0116 299 4040 (Jeanette.Hopkins@jonlee.co.uk)