Electrical Subcontracting Guide
Working for Main Contractors

The main contractor wins a project — say, the electrical installation for a new-build housing development or the rewire of a commercial building. They need electricians to carry out the work. Rather than employing electricians directly (with all the associated costs — PAYE, pension, holiday pay, sick pay), they engage self-employed subcontractors who provide their labour on a day rate or fixed-price basis. The subcontractor works on the contractor's project but is not an employee.

The most common sectors for electrical subcontracting are: new-build residential (housing developments, apartment blocks), commercial fit-out (offices, retail, restaurants), industrial (warehouses, factories, data centres), social housing (refurbishment programmes for housing associations), and public sector (schools, hospitals, government buildings). Each sector has different working practices, rates, and requirements.

Steady work without the overhead of marketing, quoting, and customer management. Access to larger, more interesting projects. No need for public liability claims handling — the main contractor manages the customer relationship. Predictable income (assuming reliable payment). Exposure to different types of work and environments that build experience and skills.

Late payment or non-payment is the biggest risk. CIS deductions reduce your immediate cash flow. You have less control over the work schedule and working conditions. Some main contractors push the scope beyond what was agreed. IR35 status can be challenged by HMRC if the working arrangement looks more like employment. You are dependent on the contractor for work — if they lose the project, your work ends.

Day rates are the most common pricing model for subcontract electricians. You are paid a fixed rate per day regardless of how much work is completed. This is lower risk for the subcontractor — you are paid for your time even if the project runs into delays or complications. Typical day rates for electrical subcontractors in 2026:

Fixed-price subcontracting means agreeing a total price for the work before starting. This carries more risk for the subcontractor — if the work takes longer than expected, you absorb the extra time. However, fixed price can be significantly more profitable if you can complete the work efficiently. Many experienced subcontractors prefer price work because they can earn the equivalent of £300-£400/day on work they know well. The key is accurate estimation — use proper pricing methods and never price from memory or gut feeling.

Standard payment terms for subcontract work are 30 days from invoice date. Some larger contractors and construction companies operate on 45 or 60 days. Be wary of any contractor pushing for 90-day terms — this creates serious cash flow pressure for a small business. Payment terms should be agreed in writing before work starts, not after the first invoice is submitted.

Under the Late Payment of Commercial Debts (Interest) Act 1998, you have a statutory right to charge interest on late payments at 8% above the Bank of England base rate, plus a fixed compensation charge (£40 for debts up to £999.99, £70 for debts up to £9,999.99, £100 for debts of £10,000+). Include a reference to this legislation on your invoices. Most contractors pay on time when they know you are aware of your rights.

Invoice promptly — do not wait until the end of the month. Invoice weekly on day-rate work and at agreed milestones on fixed-price work. Chase overdue invoices immediately, not after 60 days. Maintain a cash reserve of at least one month's outgoings to cover payment delays. Consider invoice factoring or a business credit facility for periods when payment delays create cash flow pressure.

Maintain adequate public liability insurance — £2 million minimum for domestic work, £5 million for commercial. If you employ anyone (including apprentices), employers' liability insurance is a legal requirement. Professional indemnity insurance covers claims arising from your design or advice. Keep certificates current and provide copies to every contractor you work for.

Keep detailed records of all work carried out — daily logs, photographs, material deliveries, and any instructions or variations received from the contractor. If a dispute arises about what was agreed, your contemporaneous records are your best defence. Elec-Mate's site documentation tools help you maintain a professional record of all work.

IR35 legislation targets "disguised employment" — where a worker operates as a self-employed subcontractor but the working arrangement has all the characteristics of employment (fixed hours, supplied equipment, no substitution right, no financial risk). If HMRC determines your arrangement falls inside IR35, you could be liable for additional tax and National Insurance. Ensure your subcontract arrangement demonstrates genuine self-employment: you provide your own tools, you can send a substitute, you take financial risk, and you work for multiple clients. The starting a business guide covers employment status in more detail.

Avoid depending on a single main contractor for all your work. If they go through a quiet period, lose a contract, or go out of business, you lose all your income. Aim to work for at least 2-3 different contractors and maintain your own domestic customer base alongside subcontract work. This diversification also strengthens your IR35 position by demonstrating you are genuinely in business on your own account.