Becoming a Project Management Contractor
- Limited Company Taxes
- Business Structures
- Limited Company or Umbrella Company?
- Start Up - Frequently Asked Questions
Companies large and small are appreciating the benefits of hiring experienced staff with specialist skills for short-term contracts. Because of this, the job market has seen unprecedented levels of demand for those who are able to provide temporary support to businesses that really need a dedicated expert to help them achieve their potential.
Project management is no exception, so anyone with experience in the field could potentially have a lucrative career which allows them to command fees that are significantly higher than the amount earned in permanent employment. For some, the appeal of contracting is the flexibility, which allows them to choose when and where they work, taking time off between contracts when they want to and having some control over the roles they take on.
Finding work as a Project Management Contractor
The kinds of roles you apply for will depend on your skill level and experience, but there are specialist recruiters who match candidates with appropriate project management roles. Job board websites where you can search job listings by sector or industry as well as by location, rates of pay and the type of work available may also be useful. Whilst many project management skills are transferable, there are certain areas in which experience of similar projects could give you a huge advantage.
You may find the following recruitment agencies that specialise in project management beneficial when looking for your first contract:
- Hays– an international recruitment agency which recruits for contract project management positions across a range of sectors including IT, construction and finance.
- Badenoch & Clark – recruit for permanent and contract positions in project, programme and change management roles.
- Aston Carter – place project management professionals in both permanent and contract positions.
It is also a good idea to build and maintain your personal network by keeping in touch with colleagues and clients from previous jobs, whether permanent or contractors, and also by carrying business cards wherever you go. Sites such as LinkedIn allow you to connect with people that you know in a professional capacity and can be a good way to build up your profile in your chosen field. A recommendation from someone who has actually worked with you will go a long way towards reassuring a potential client that you are the right person for the job, so never underestimate the power of making contacts on any project that you contribute to.
It is also worth contacting companies that you would like to work for and give them your details so that you get your name known amongst potential employers. Even if they do not have a vacancy immediately, they will often put your details on file and get in touch when they do have a job which fits your experience. Recruitment can be an expensive business, and an organisation which needs someone at short notice will often consult their records to look for likely candidates, so making sure that you are one of them could be as simple as sending a speculative email.
Rates of pay for Project Management Contractors
The amount that you could earn as a project management consultant will vary depending on your skill set, experience and the role in question. For a rough idea of the amount that you could expect to earn as a project manager contractor please see the daily rates below (based on 2014 availability):
- Project Manager based in Blackpool: £300 - £400 per day
- Project Manager based in Manchester: £450 - £550 per day
- Project Manager based in Berkshire: £500 - £525 per day
- Development Project Manager based in London: £500-£600 per day
Naturally these daily rates will be subjected to tax and national insurance contributions. Use our take home pay calculator for a clearer idea of the amount that you could take home as a project management contractor.
Starting out as a Project Management Contractor
Whether you have chosen to become an interim project manager to enjoy the flexibility of choosing your own career path, or because of a lack of opportunities in the realm of traditional employment, being your own boss can be hugely rewarding. You can manage your own time, organise your working life around your existing commitments, take your career in any direction you choose and gain experience in the fields that interest you most.
As a project management contractor the two most common ways to operate are through an umbrella company or by forming a limited company. For some people, working under an umbrella company is an easy way to minimise their administrative responsibilities whilst still retaining some control over the contracts they choose to take on. This way they are effectively ‘employed’ by the umbrella company and taxed at source under the PAYE system after which the umbrella company’s fee is also docked. Project managers working through umbrella companies usually take home around 60% - 65% of the value of their contracts.
However, if you are keen to maximise your earnings and take home as much of your salary as possible, working for yourself as a limited company director may allow you to keep more of your income, typically around the 75% - 80% mark. Forming a limited company is a quick and easy process; all you need is a business bank account and around 15 minutes a month to spend on administration tasks and you are able to take advantage of a range of tax planning opportunities.
If you are confused about your options and want some advice on how best to manage your finances, it is a good idea to talk to an accountant. Firms that specialise in representing contractors and freelancers are usually best for those who need specialist advice which takes into account the latest regulation changes and updates.
Choosing an accountant
If you are considering contracting as a project manager then using a specialist is the best way to ensure that you are benefitting from the money-saving opportunities available to you. From negotiating your way through the flat rate VAT scheme to planning for your future and getting your pension in order, an accountant who specialises in helping contractors and independent professionals will take care of all your taxation needs.
Your accountant will explain how to work tax efficiently, help you make decisions about the best way to invest in your business and give you advice on how you can manage your finances to give you the best income. Your accountant will also help you prepare your annual self-assessment tax return and ensure you don’t incur any penalties for late or incorrect submission.
How Nixon Williams can help
All of our accountants are specialists in the contractor and freelance market and have a wealth of accountancy knowledge specific to this sector. Our accountants maintain a working knowledge of any changes to tax legislation to ensure that we always provide our clients with the best, up-to-date accountancy advice. As well as providing ongoing tax and accountancy guidance, we will take care of everything from forming your limited company to helping you to complete your yearend accounts and we will always be on hand to answer any questions as they arise.
For more information about contracting and how Nixon Williams can help you, please contact our new business team on 01253 362062 or email firstname.lastname@example.org.