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The majority of retired police officers – certainly those with 20-30 years' service – are looking for a better work-life balance when they leave 'the job'.

Many former officers already find contracting and temporary work is the ideal way to achieve this. Of course, like any change of job, it takes some adjusting to. So we've put together tips and advice to help you look more closely at your contracting and temporary job and career options.

What is contracting/temporary work?

Contracting work or temporary employment is where an individual supplies labour to an employer, but is not deemed to be an employee. The legal distinction is the individual supplying their labour is engaged in a ‘contract for services’ as opposed to a ‘contract of services’ where the individual is directly employed by the organisation they are working for.

As a contractor, you are in essence a self-employed worker. So you have the flexibility to undertake work assignments which fit around your lifestyle and personal agenda. For instance, you might want to work throughout the winter and take the summer off. Maybe month-on month-off is the answer?

The agency route

Typically, contracting work is organised via recruitment businesses and agencies that supply temporary workers to organisations – usually under a 'contract for services'. 

The recruitment business is responsible for finding the opportunities on behalf of their registered worker. It then supplies their labour to the employer organisation for work assignments, lasting anything from one day up to two years.

During their work the temporary employee uses the organisation's resources and facilities and is supervised by its management team. However, they are paid by their recruitment agency and their contract for services is with the recruitment agency, rather than the employer.

Employer-employee direct

Contracting work organised directly between the individual and the employer commonly takes one of the following forms:

• Limited company ­– directly engaged, self-employed worker status via an arrangement in which the individual creates a limited company whose purpose is to supply their labour to organisations.  
• Umbrella company ­­­– provides employee support services, such as handling the salary payment arrangements between the two parties. Find out more about these services from the leading umbrella company, Eden, and read more in the 'Getting paid' section.

I'm a retired police officer. How can I access contracting/temporary work?

It's good to know the specific skill sets police officers can offer are very much sought after. So you're likely to find a choice of many contracting and temporary work opportunities available.

The greatest demand for policing skill sets comes from police authorities, local authorities, central government, regulators, and commercial companies that provide investigation support services to the legal and insurance industries.

However, gaining work directly in these roles can present a challenge without a good personal and business network, such as with senior hiring managers. Without this, the more common route is to take advantage of a specialist recruitment business to find the work for you.

Several leading recruitment businesses specialise in supplying policing skill sets to these different markets:

• www.PoliceSkills.co.uk is a leading supplier of retired and former police officers to police authorities as temporary workers.
• www.EnforcementSkills.co.uk recruits retired and former police officers to local authorities and regulators in the UK as temporary workers. Their roles usually focus on investigation and enforcement.
• www.CommunitySafetySkills.co.uk supplies retired and former police officers to the community safety sector. These roles deliver crime prevention in agencies within the Crime & Disorder Partnership arrangements, including local authorities, fire authorities, housing associations and the probation and prison services.

Getting paid as a contractor/temporary worker

There are several options open to a contractor/temporary workers in terms of how you arrange your pay.

Payment via traditional Pay As You Earn (PAYE) schemes

Working as a contractor/temporary worker via a recruitment business means you can be paid in the manner most people are used to. This means you'll be paid 'net' by the recruitment business, with Income Tax and National Insurance Contributions already deducted. The main benefit to this payment method is the work you deliver is covered by the Employment Agencies Act 1972 which means you're deemed to be an employee of the recruitment business and are therefore entitled to holiday pay and statutory sick pay.

The downsides of this payment method are that it's the least tax efficient and as a contractor/temporary worker you are unable to claim for expenses incurred whilst delivering the work.

Payment via your own limited company

Working as a contractor/temporary worker you are engaged in a ‘contractor for service’ and are deemed not to be employed directly by the organisation you're supplying labour services to. Because you are selling your labour without being employed, setting up a self-managed limited company (SMLC) is an option you can consider however there are important legal issues you need to consider before using this payment method.  Research has shown this option is not suitable for 90% for former/retired officers.

How SMLCs work

SMLCs are registered limited companies which supply labour services. The individual becomes a director of the limited company, while the limited company supplies the individuals labour and then sends an invoice for the completed work. The money paid by the organisation for the services rendered is then paid to the SMLC and not the individual. The individual is then able to ‘draw down’ money from the SMLC in several payment forms such as direct income or dividends. In addition, the individual is able to claim expenses incurred whilst delivering the work and offset these expenses against tax owed.

SMLCs are at first glance very attractive ways for contractors to be paid, due to their tax efficiency. However, in most situations the Inland Revenue does not regard SMLCs as acceptable payment schemes for contractors or self-employed workers as they do not comply with Inland Revenue guidelines on the use of SMLC known as IR35.

IR35 guidelines and advice

A contractor wishing to use a SMLC needs to comply with a series of tax rules which are named IR35. You can view our guide to IR35 here and visit the HM Revenue and Customs website for more information on IR35.

In summary, you may only use a SMLC if you are supplying labour services as a consultant rather than a self-employed worker or temporary worker. A consultant is defined as a worker who

• has several client organisations that they provide labour services to;
• does not work under the direct supervision of the employer organisation;
• does not use the employer organisation’s facilities in the manner of an employee; and
• is able to replace his/her labour with another individual’s labour to cover work left uncompleted by the SMLC, for example, due to illness.

As a result, most retired officers choose to work via recruitment businesses and directly, because working as self-employed and the compliance arrangements of SMLCs.

Payment via an umbrella company

An umbrella company is a hybrid, delivering many of the tax efficiencies of SMLCs while ensuring the worker is compliant in terms of IR35 regulations. It's designed to deliver tax efficient payment services for contractors.

Eden has been supplying tax efficient pay roll services to former and retired police officers for over 7 years. We have helped over 3,400 former officers to enjoy tax efficient pay services whilst working as a contractor. Our track record with former and retired officers means you are dealing with a business that understands your particular issues and requirements while ensuring you are completely compliant with Inland Revenue rules and guidelines. Find out more about Eden.

By choosing this route you're employed by the umbrella company, which then sells your labour services via a recruitment business or direct to an employer organisation. On the money side, the umbrella company handles your invoices and payments. Additionally, the umbrella company will pay you a salary via the PAYE method to ensure compliance with IR35. Better still, the remainder is put to more efficient use by offsetting your expenses against tax incurred.

More info and help required?

Should require any further assistance about umbrella payment services, simply contact Eden on email enquiries@edenoutsource.co.uk or by telephone on 0844 686 8350.