Should I Become a Contractor?
A five-minute readiness check across your finances, skills, market and knowledge — with the money side costed on 2026/27 tax rules.
Contractor readiness check
Ready to explore contracting?
This tool helps you assess if contractor life is right for you.
We'll evaluate your situation across the areas that decide whether contracting works:
- Financial readiness and runway
- Skills and market demand
- Personal circumstances and risk tolerance
- Knowledge of contracting basics
Your contractor readiness
Based on your answers · money figures on 2026/27 rates
Calculating…
Your results are being generated.
Readiness by category
Key insights
What stands out about your profile
Financial snapshot
Detailed assessment
Ready to take the next step?
Put real numbers on it, then talk to someone who does this for a living.
This tool scores your contractor readiness across four dimensions:
- Financial readiness (30%): your savings buffer (6–12 months is the working target), income expectations and financial commitments, including whether you are planning a major purchase such as a house.
- Skills & market (30%): your sector — IT, finance and engineering/infrastructure still have the deepest contract markets in 2026/27 — plus experience level and professional network.
- Personal fit (25%): risk tolerance, motivation and support at home. Contracting is not for everyone, and the scoring says so.
- Knowledge (15%): IR35, business structures and contractor basics. On 2026/27 rates, £100,000 of contract income leaves roughly £65,200 outside IR35 against £61,400 inside — about £3,800 a year, down from about £5,200 in 2025/26 now that dividend tax has risen to 10.75% and 35.75%.
Higher scores mean greater readiness. Even a "strong" score benefits from thorough preparation.
The day rate estimate uses the common industry rule of thumb:
- take your annual salary;
- divide by 220 (a typical working year after holiday and bank holidays);
- add a 30–50% contractor premium — we use 40% as the mid-point.
Actual rates vary considerably by role, sector, location and market conditions. Use the day rate calculator for a fuller estimate, and the IR35 calculator to turn a rate into take-home pay on 2026/27 rules.
A lower score does not mean you cannot become a contractor — it means more preparation first:
- Financial concerns: build the emergency fund to 6–12 months, and open a separate tax pot from day one. Outside IR35, tax and NIC take roughly 30% of turnover at £80,000 and about 38% at £120,000 on 2026/27 rates.
- Experience gaps: build skills first. In IT that means the areas clients are still short of — cybersecurity, cloud, DevOps, data and ML. Multi-skilled contractors are increasingly valued.
- Knowledge gaps: these are the quickest to fix. Learn how IR35 works, note what actually changed on 6 April 2026 — dividend tax up 2 percentage points to 10.75% and 35.75%, and joint and several liability across umbrella supply chains — then speak to a specialist contractor accountant.
- Mortgage plans: specialist lenders accept contractors with as little as 12 months' contract history and will assess you on your annualised day rate. Speak to a contractor mortgage broker.
Plenty of successful contractors started from a lower score and prepared well. Timing matters.
This assessment provides arithmetic calculations and general guidance only. Verify tax figures with HMRC guidance on off-payroll working (IR35) or a qualified accountant.