How To Become A Contractor (In UK Construction)

Becoming a contractor in the UK construction industry can be an exciting way to build a lucrative career or business. Learn how to get started in this CHAS guide. 

The UK construction industry is a diverse and exciting sector, offering numerous opportunities for people to build rewarding careers as contractors. Despite the looming threat of a recession, the construction sector needs 225,000 additional workers to meet demand by 2027 — that’s equal to around 45,000 workers per year. 

In this CHAS guide, we provide an overview of how to become a contractor in the UK construction industry, covering everything from qualifications and registration requirements, and practical considerations for running your own construction business.

What Does A Construction Contractor Do?

In the construction industry, a contractor is typically an entity or an individual that a client contracts to complete work for a project. This typically involves many construction activities, such as building, altering, demolition, or maintenance of work sites. 

However, a contractor may not have all the necessary expertise or trades required to complete all aspects of a construction project independently. As a result, they are responsible for engaging and coordinating with subcontractors who can perform certain aspects of the work. This can involve coordinating with architects, engineers, and other professionals to ensure the project meets the necessary specifications, timelines, and budgetary constraints.

In most cases, a significant number of subcontractors are involved in completing a construction project. They can be working under contract for an umbrella company or agency contracted by the client. 

Related Reading: What Is A Contractor?

Steps For Becoming A Construction Contractor

While your journey towards becoming a contractor will depend on your specific circumstances, the following steps are usually how businesses and self-employed individuals get their start in the industry. 

Step 1: Gain Relevant Qualifications

First, you need to get the skills and know-how to reliably carry out construction work, whether it’s electrical work, building work, plumbing or even cleaning and maintenance.

To become a contractor in the UK construction industry, you must have the relevant qualifications and certifications. There are several routes you can take, including:

• Apprenticeships
• Vocational qualifications
• Higher education degrees.

Step 2: Register As A Contractor

To register as a contractor in the UK, you will need to follow these steps:

• Choose your legal structure: You will need to decide on the legal structure of your business, such as sole trader, partnership, limited company, or limited liability partnership (LLP). Each legal structure has different requirements and benefits.
• Register your business: If you are setting up a limited company or LLP, you will need to register with Companies House. You can do this online or by mail. If you are setting up as a sole trader or partnership, you do not need to register with Companies House, but you may need to register for tax purposes.
• Get insurance: You may need to get insurance for your business, such as public liability insurance or professional indemnity insurance, depending on your work type.
• Register for taxes: You must register for taxes with HM Revenue and Customs (HMRC) and obtain a Unique Taxpayer Reference (UTR) number. You may also need to register for VAT if your business turnover is above a certain threshold.
• Register with the Construction Industry Scheme (CIS): You are required to register as a contractor with the CIS if you pay subcontractors to do construction work. You can learn more about this process by reading the government’s guidance on the CIS.
• Keep records: You will need to keep accurate records of your income and expenses for tax purposes.
• Step 3: Obtain Relevant Licences And Insurance

The construction industry is heavily regulated due to a wide range of factors. For starters, there’s the high-risk nature of construction work. Data from the Health and Safety Executive (HSE) shows that construction saw the highest number of fatal accidents — far more than other industries with a dangerous reputation, such as agriculture, forestry and fishing, and manufacturing. 

Source: HSE

Depending on the construction work you’ll be undertaking, you may need to obtain additional licences and insurance policies. 

• For example, if you’ll be working on a construction site, you must hold a Construction Skills Certification Scheme (CSCS) card to prove your competence and qualifications.
• You’ll also need to demonstrate your organisational capability to carry out construction work safely and without risking the health of workers and the public. This is where third-party assessors like CHAS come in, allowing you to use prequalification assessment schemes such as the Safety Schemes in Procurement (SSIP), and the Common Assessment Standard. 
• You may also need to hold public and employer’s liability insurance, which will protect you in the event of injury or damage caused by your work.

Related Reading: A Guide To Health And Safety Procedures For Contractors

Step 4: Build a Network of Clients

To succeed as a contractor in the UK construction industry, you’ll need to build a network of clients interested in your services. You can do this through a range of marketing and networking strategies.

This is another area where becoming a CHAS member offers incredible value to your business. Whether you join as a CHAS Standard, CHAS Advanced or CHAS Elite member, you will instantly get access to our network of 2,500+ buyer-based clients across the UK actively searching for prequalified contractors.

Related Reading: How Do Contractors Get Clients? Guide To Getting More Work

Step 5: Manage Your Projects Effectively

Once you’ve secured a project, it’s essential to manage it effectively to ensure it completes on time, within budget, and to a high standard. 

There are several project management tools and software programs available to help you manage your projects effectively, including:

• Gantt charts, which provide a visual representation of your project timeline
• Project management software, such as Asana or Trello, which allow you to collaborate with your team and track progress
• Budgeting software, such as QuickBooks or Xero, which can help you automate invoice generation and monitor cash flow.

Begin Your Journey Towards Becoming a Contractor

Whether you’re a sole trader or a business with employees, becoming a contractor allows you to work independently and choose which clients to work with. Depending on your strategy, you could enjoy the rapid growth of a startup or the cash flow of a regular employee. 

Be sure to check CHAS Insights to find more insights and guides on contracting in the UK construction industry. If you are interested in demonstrating your organisational capability to manage supply chain risks effectively, become a CHAS member by choosing from one of our membership packages. Speak to a CHAS advisor to get started.