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Definitive Guide: Becoming a Building Contractor in the UK

February 13, 2023Agim Arra |

The process for becoming a building contractor in the UK is relatively uncomplicated, although it does involve some potential pitfalls you need to be aware of. Take the time to familiarize yourself with all legal requirements and similar details so you can avoid unexpected trouble down the road.

1. Assess the current market situation

Block patio under construction

Before you even begin, you need to understand your current market situation. Is there a significant demand for contractors in your area in the first place? Are certain specializations sought after more than others? There are many factors to consider here, and proper market research is the foundation of any successful contracting business.

2. Get familiar with taxes

Pavement under construction

You’re about to run your own business. This means that you’ll need to understand your tax situation in full detail. Working with an accountant can help, but it’s still your responsibility to understand everything you’re doing.

Pay special attention to VAT and IR35. Building contractors have various specific cases involving VAT and you will want to be sure that you’re not charging extra VAT on certain contracts. IR35, on the other hand, is a set of regulations which dictate who exactly is considered an independent contractor. It’s designed to prevent contractors from working as regular employees under the guise of their own company, and it has some serious implications for your taxes.

3. Register your business

coastal inspired driveway

The next step is to register your company. You’ll most likely want to operate as an LLC. You can technically do the official registration sometime after starting your business – there’s a three-month grace period for that. But it’s highly recommended to take care of that as early as possible to avoid any bureaucratic hurdles.

4. Secure your first client

driveway project

Now you’re ready to find your first client! This can be done in various ways. You can go online, post classified ads in local newspapers, or rely on word of mouth. All options have their advantages. It’s a good idea to set up your own website as well, as this will not only help you draw in new clients more easily but will also give you a more legitimate appearance on the market. And when you land your first client, you should give time and consider buying insurance!

5. Explore opportunities for expanding

block paved driveway

Once your business has been running for a while, you’ll want to explore options for expanding it. There are multiple opportunities for that. You can look into expanding your own skill set, joining building contractor companies or alternatively, you can hire new employees and branch out your services in different directions. Whatever you choose to do though, make sure you have a clear vision of the future and know where you want to be a few years from now.

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