Ultimate UK contractor onboarding checklist

First time as an independent contractor? New to freelancing and need help with the contracting onboarding process? Working in the UK?

Salt has partnered with Knightsbridge to create a simple step-by-step guide to getting through the admin side of your contracting career. Read our contracting onboarding checklist to get everything in order quickly and effectively, so you can focus on getting your business off the ground.

We all know that getting admin and tax documentation sorted is not as interesting or glamorous as the scope of work ahead of you, but getting it wrong can have negative repercussions for you, your business and your clients.

Here are a few options and instructions to help get started for independent contractors in the UK:

Option 1: Working as independent contractors

Many independent contractors prefer to be in charge of their own work hours and clients and therefore choose to operate through their own Personal Service Company (PSC) or limited company. There may be all sorts of different reasons to work as an independent contractor, whether it’s for financial benefit or simply a lifestyle choice. 

At the same time, running your own business can be time-consuming, increases your admin burden and also exposes you to more risk. It is, therefore, best to get professional advice from an accountant and a legal advisor before you decide to set up your own company.

UK contractor FAQs:

How quickly can I set up a PSC or limited company?

You can set up a limited company within a few hours. We recommend using a professional accountancy provider, although there are steps you can follow yourself if you have the time. Salt and other recruiters can connect you with trusted accountants to help you register your company, manage bookkeeping, handle taxes, and stay compliant. See our contracting roles here.

Which company documents have to be provided?

You’ll need to provide your certificate of incorporation, bank statement, VAT certificate (if registered), and proof of insurance such as Professional Indemnity or Public Liability. When working with Salt, we’ll also need your ID, National Insurance number, and any client-required documents. All personal data is handled under GDPR — see Salt’s data privacy policy for details.

Why do I need to provide a bank statement as part of contractor onboarding?

Recruiters like Salt need your bank statement to verify that your PSC is the valid account holder for the nominated business account. This ensures payments go to the correct company. Your details remain secure — we don’t need to see your balance — or you can provide an opening letter from your bank instead.

What is IR35?

IR35 is UK tax legislation [1] that governs off-payroll working, introduced by HMRC to prevent disguised employment and tax avoidance. If you work inside IR35, tax and National Insurance are paid through PAYE [2] by you or your umbrella company. To be considered outside IR35, you must operate as a genuine independent business. Both your written contract and day-to-day working practices with your client are reviewed to determine your status. If deemed outside IR35, you are recognised as self-employed for tax purposes and are responsible for ensuring your personal and company taxes are paid correctly and on time.

Remaining outside IR35 typically depends on four key factors:

Control: The client[3] should not dictate what work you do or how you do it.

Substitution: You should be able to send a substitute to carry out the work, with the client having limited control over the replacement.

Mutuality of obligation: You are not obliged to accept all work offered, and the client is not obliged to provide it.

Financial risk: You may incur personal financial risk in performing the work.

If HMRC sees that the client controls your work, prevents substitution, or sets your hours, you could be classed as ‘inside IR35’. We recommend seeking advice before starting on-site to confirm your tax status. [4]

If you’re working with Salt, we are more than happy to acquire the relevant details from our client if you need more info on your working conditions. Simply email contracting@welovesalt.com and we’d be happy to assist you further.

Company insurance — is it really necessary?

Absolutely. Especially in the Digital industry, it’s rare for clients not to require contractors to be insured against risks like cyber incidents, property damage, or personal injury. If your work causes damage or financial loss, insurance could protect your business from costly claims and may be essential for staying operational. Having professional indemnity and business insurance also signals that you’re acting as a genuine business if working outside IR35. To stay compliant and protected, all PSC contractors must have suitable insurance in place — £1 million coverage for both Professional Indemnity and Public Liability.

Salt has partnered up with Kingsbridge to offer insurance at a competitive rate.  Should you need to arrange cover, you can get a quote by calling Kingsbridge on 01242 808740 or online at kingsbridge.co.uk.

Option 2: Working via an umbrella company

An umbrella company is a company that independent contractors can join as an alternative to setting up (and working through) their own limited company.

When you join an umbrella, you become their employee. The umbrella acts as an intermediary between you and your recruitment agency and can help with administrative tasks such as accounting, tax documentation and payroll. 

The umbrella company will also deduct Pay As You Earn (PAYE), which is the HM Revenue and Customs’ (HMRC) system to collect Income Tax and National Insurance from employment. Therefore, you will have access to employee benefits that everyone in permanent employment is entitled to, including sick pay, maternity pay, paternity pay, annual leave etc.

Umbrella company FAQs:

Which umbrella company should I work through?

Unfortunately, some UK payroll companies operate non-compliant models, and since the 2017 Criminal Finance Act, recruiters can face fines or prosecution if they fail to prevent tax evasion. At Salt, we’ve put together a list of approved umbrella companies vetted by us and accredited industry bodies. You’ll find this list in your Salt Welcome Pack.

I want to work with an umbrella company, not on the approved list. What needs to be done?

Email contract@welovesalt.com and we will advise you of the next steps. We are prepared to work with umbrella companies that are not on our Approved Supplier List, however, they need to be fully vetted before we can work with them.

What documents do I need to send?

You’ll need to provide identity documents, National Insurance number and referee details (if applicable). Your umbrella company will provide their company documents.

I need more info?

You can explore our contract roles from around the world here, including opportunities in Consulting, Creative, HR, Marketing, Sales and Technology.

If you’d like to find out more about Kingsbridge Contractor Insurance, visit their website.

[1] Under the proposed reforms for IR35 in the private sector, the responsibility to determine your tax status will shift to the end user, who needs to apply reasonable care when making this determination however, the proposed legislation will not enter into force until April 2021.

[2] The Pay As You Earn (PAYE) system is a method of paying income tax and national insurance contributions.

[3] The terms refers to the end user of the technical services provided by your business. For the avoidance of doubt, Salt, the employment business, is not the client.

[4] For more information about the IR35 test, please seek professional advice from an accountant/ legal advisor. HMRC has also published info: Gov UK