Guide to Contracting for Women in Tech

Contracting for womenContracting for women in tech

Contracting for women in tech is an increasingly popular way of working, and every contractor has their own reasons for enjoying it.
Being a contractor means you will work for somebody else for a fixed period under a fixed contract to complete a task or project. You’re effectively selling your skills and time, and will usually be paid by the hour or on a daily rate.
In a recent study commissioned by IPSE, the Association of Independent Professionals and Self Employed, it has been shown that 40% of the 1.88 million freelancers working in the UK are women, 270,000 of which are mothers.

Benefits of contracting for women in tech

It comes as no surprise that contracting for women in tech is becoming a more popular choice as it offers a range of financial and lifestyle benefits for those ready to leave permanent employment. These include:
• Being your own boss – which can be extremely enjoyable and satisfying;
• More money – contractors are usually paid more than employees working on the same project, and pay less tax;
• Greater freedom and control over your working life – contractors can choose when and where to work, when to take holidays etc.;
• Variety – by moving from contract to contract and company to company, contractors usually develop very varied experience and an impressive CV;
So as well as the potential financial rewards of contracting, it can also have huge benefits which will improve your work-life balance. Being able to pick and choose your hours allows you to fit in with various childcare requirements, spend more time with your family, or even take up a new hobby, all whilst maximising your earnings potential.
There are of course also a few pitfalls to contracting for women in tech that you will need to consider. These include not being protected in the same way as permanent employees, not receiving holiday or sick pay, and working alone without a team around you for support.

Before you get started as a contractor

If the advantages outweigh the disadvantages and you decide contracting is for you, then there are a few things that you’ll need to do before you can get started.

Do your research

You will need to do some research into your market to ensure that there is a demand for your skillset as a contractor. You can do this by looking at jobsites and searching online, or by speaking with contractor recruitment agencies. From this you will be able to find out what kind of contractors are available, the location of these contracts, whether you’re suitable for them and how much you could earn.

Build up your network

Networking in all forms will help you gain a better understanding of the current market and enable you to work out which of your skills and experience are relevant and how to position these on your contractor CV. This includes keeping in touch with former employers and colleagues, using online platforms such as LinkedIn as well as attending networking events. A good place to start networking is the ContractorUK forum where you can talk to and learn from other contractors. IPSE also runs the Women in Freelancing Network (WFN), which aims to support women contractors across the UK. The WFN provides news and advice as well as networking events.

Perfect your CV

As a contractor having an up-to-date CV that really sells your capabilities and achievements is essential. You must also remember that clients are looking to buy your skills and industry knowledge, on a short-term basis, and therefore your main priority is to highlight the skills you have early on in the document. Your CV is your own personal marketing tool and recruiters will often scan CV’s quickly so getting the key information across in an effective way is crucial.

Setting up your contractor company

The next step is deciding how to set up your new contracting business, and essentially you have the choice between setting up a limited company or operating under an umbrella company.

Limited Company

Setting up a limited company where you become a director and shareholder is the most tax efficient way of contracting for women in tech. Running your own limited company means you will be able to claim back a wider range of expenses as well as having access to the flat rate VAT scheme which allows you to keep some of the VAT you receive. You will also have complete control over your financial affairs. You must also keep in mind that there are legal obligations and paperwork to be kept on top of when running a limited company, however good contractor accountants will be able to assist with this.

Umbrella Company

Umbrella companies will take responsibility for invoicing, paperwork, collection of money due and payments to contractors minus tax and national insurance deductions, meaning contractors effectively become PAYE employees again. This means you do not have to get involved with any of the administrative duties associated with running a limited company which is a lot more convenient for some, especially those only looking to contract in the short-term. However, this route offers fewer benefits for contractors in terms of reducing tax liabilities and you will also be required to pay a service fee to the umbrella company.

Final considerations

Finally there are a few more things you will need to think about before you can start your first contract:

Business Bank Account

If you go down the route of contracting via a limited company then you will need to open a business bank account. Your limited company is a separate legal entity and as such the money your company makes needs to be kept completely separate from your personal funds. Umbrella contractors on the other hand are not required to open a separate bank account as they are PAYE employees.


IR35 affects all contractors who do not meet HMRC’s definition of ‘self-employment’. Contractors benefit from tax advantages due to the increased risks and responsibility of contracting and the lack of employee benefits they receive. Therefore if you are deemed to be working as a contractor without accepting the increased responsibilities, or working as a ‘disguised employee’, then you will not be entitled to these tax advantages. You can protect yourself and your business by getting an IR35 contract review on every new contract and also by investing in IR35 insurance.

Professional Indemnity Insurance

As a contractor you will be providing professional advice and services which your clients rely on, therefore if something goes wrong and it causes the client financial loss they have a legal right to claim against you. No matter how skilled you are or how careful you are on a contract, there is always potential for you to make a mistake. Clients may also allege contractors have made mistakes or breached their contract when they have not. Professional indemnity insurance can protect contractors against such claims, and may cover legal costs due to negligence, or compensation needed to pay to correct a mistake. In many contracts it is now often specified as a requirement.
For further advice and information on becoming a contractor visit ContractorUK.