Is contracting for you?
If you are considering becoming a first-time contractor, there are many things to consider.
Contracting has both advantages and disadvantages over permanent work.
|Possible Advantages||Possible Disadvantages|
|You are your own boss||Less security – assignments will have an end date|
|You can earn more||No holiday pay|
|Freedom – you can choose when to take assignments and when not to||No sick pay|
|Variety of work – different clients, different technologies||No employment rights or redundancy pay|
|If a contract is outside IR35 you will pay less tax||Administration of running your own company|
Other things to consider:
- Do you have the personality to be able to build new working relationships easily?
- Are you in a position to work far away from home if necessary?
- Would you prefer to work via an umbrella company or your own limited company? If the latter, do you need an accountant?
- Is your job easily replicable in the event you later feel that contracting is not for you?
- If you perform the same role as a permanent employee, are paid by time rather than project, work on the client’s equipment, work the same hours as permanent employees, and take direction/are supervised by the client, you are probably not outside IR35
If you feel contracting would be a good career move for you, the next step is to do some research. Don’t give up your permanent job yet!
You should research how in demand your skills are, where the contract opportunities are, and what you are likely to earn. Circle can provide you with free, confidential advice on the issue, feel free to call us if you would like more information!