Black and white photo of a child walking on a curb on an empty street. He's got his arms out to help him balance. The photo is the cover image for Revoco's How to become a contractor blog

Written by:
Hannah Rayner

How to become a contractor in the tech industry

Is becoming a tech contractor wise? Why do tech companies hire tech contractors? And how do you become a contractor in the tech industry? All valid questions that we have the answers to.

The tech sector is booming, and it’s the perfect time to get into contracting in IT, software development and beyond.

Many full-time employees switch from full-time employment to being their own boss, enhancing their craft and learning new skills in varying work environments along the way.

But the process of becoming a contractor requires a bit of thought. To set you on the right path, here are a few things to consider before making the leap into the world of self-employment.

Why do tech companies hire tech contractors?

Tech contractors are a valuable resource for any business requiring specific tech skills and information. And over recent years, this style of work has become increasingly popular.

There are over 2 million freelancers in the UK, and they’re extremely valuable members of the UK workforce, contributing roughly £125 billion to the economy.

A contractor tends to be a skilled, self-employed professional with more flexibility in working patterns and hours, specialising in different fields of tech.

There are many reasons why tech businesses lean towards this type of employment. For instance:

  • Speedy hiring – Tech contractors can give you quick access to knowledge and expertise without going through the recruitment process for a new employee. The good news is that there are contractors with varying skills across the board, so they can give you a hand to get the job done.


  • Easy access to in-demand skills and experience – Tech contractors have years of experience and exposure to different businesses in a specific field. And when working as a contractor, they’ll need to be disciplined and self-motivated to achieve incredible results.


  • Using resources carefully and wisely – Permanent employee roles rarely focus on just one perfected skill or tool. It generally covers a mix of everything. A contractor can step in where specific skills are needed to save complete a single task to free up team resources.


  • Cost-effective – By hiring a tech contractor for a set time, companies avoid large costs associated with permanent employees, such as pensions, national insurance and equipment costs.

If selected correctly, a tech contractor can help to level up a project, address urgent tech problems, and keep a company secure during strained periods.

How to set up as a contractor in the UK


Here’s how to set up as a contractor in six simple steps:

1. Decide if this style of work is correct for you

Working as a contractor isn’t the same as being employed in a full or part-time role. Therefore, it’s essential to learn the difference and the regulations that come with this style of work.

Contractors are responsible for their business and don’t get employee benefits like pensions and sick leave. But, on the flip side, contract work can be highly paid, especially if you have a high-demand specialism.

If you like the idea of flexible working and entering different projects, contract work in the tech industry is a viable option.

But it’s best to do your research, look up current jobs and get support and advice to help you make the right choice for you.

2. Find your niche

IT contracting is a competitive industry, and companies need new skills and expertise. To be successful, you need to find your niche.

Identify your strengths, skills, and unique insights and build a CV to demonstrate you as a saught-after tech contractor with valuable knowledge to elevate a project.

3. Get the legal information sorted

Most contractors either work as a limited company as a sole trader or as an employee via an umbrella company.

Working under an umbrella company is straightforward and doesn’t have as many administrative tasks as running your business alone.

Starting a limited company can improve your earnings as it’s more tax efficient. It also lets you claim more expenses.

They both have benefits and drawbacks, so research which one best suits your lifestyle before you jump in feet first.

4. Understand IR35

IR35 is a UK tax legislation that targets ‘disguised’ employment.

It’s always practical to be aware of this before becoming a contractor, as there have been widespread issues and complaints that genuine contractors are being called under the IR35.

If you choose to work and create a limited company, you must turn to professional guidance to understand whether or not this legislation applies to you.

5. Sort out insurance

Even the most highly skilled and experienced tech contractors can make mistakes, and this can be detrimental to a business.

Tailored insurance can help to protect you against risk and potential business loss.

As an IT contractor, your insurance coverage might include professional indemnity insurance and public liability.

You might also be inclined to include business equipment insurance if you employ anyone along the way. And if that’s the case, you will be legally required to take out your employer’s liability insurance.

6. Find your clients and build your network

Now that you’re set up and ready to go, it’s time to find your work and build a network of trustworthy and reliable clients.

Tech contractors generally work directly with a client or through a recruitment agency.

Working directly with a client can be a brilliant option if you already have a network of people looking for your services, or you might find work on job boards or through word of mouth.

A recruitment agency can take care of the legwork and act as a buffer to help improve your experience.

Need a hand becoming a contractor?

At Revoco, we help our clients attract and hire the best tech talent.

So, if you’re a tech contractor, whether that be in tech, design, or just about any other role in the world of tech, we can help you find the work you need.

Take a look at our current vacancies or read our salary report to assess your rates.


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