Would Becoming a Contractor Be Right For You?
If you would like to be your own boss, then rather than starting your own business, could working as a contractor be something that could work for you? There are quite a number of benefits that come from working as a contractor, which can range from higher rates of pay then you would get doing the role as an employee, as well as some flexible working, more choice with where and when you work, as well as when you’re able to take holidays.
However, nothing is ever perfect in life, so there are a couple of downsides to working as a contractor too. Being a contractor can mean that you have less security than you would if you were formally employed. So you need to think carefully before you decide to take the leap to being a contractor. So to help with that decision, here are some things to help you to see if this is going to be right for you on your journey to working in the career that you want to be in.
Do your research
Firstly, you need to take steps to make sure that you thoroughly research the industry that you are working in, to make sure that there is a demand for what you do and that there are enough jobs for what you want to do as well. You should also look into the rate of payment that contractors get in your industry; will it be enough money for you? You can look online, speak to recruitment agencies, check job postings and job descriptions online, and so on. Something else to think about is seeing if there is demand for the skillset that you have and where the demand is; would you need to travel?
Get to grips with IR35
IR35 is a piece of UK tax legislation that directly impacts contractors. It was originally designed to stop contractors working as ‘disguised employees’ by taxing the contractors at a rate that is similar to employment; this will impact all contractors who don’t meet HMRC’s self-employment definition. So if you want to work as a contractor, you need to get to grips with all of this, to make sure that you are keeping compliant to all of these things. Contractors can benefit from tax advantages, but if you are working as a contractor, with the same responsibilities, control and even benefits as a permanent employee has, then you are not entitled to a different tax system and then you shouldn’t declare yourself inside IR35. But get to grips with it all, because if you declare this incorrectly, then you could face a huge tax bill.
Find a contract
One of the easiest ways to find a contract is by looking for them online. Looking at job boards online can be a good way to see what kind of people are recruiting contractors, and that can be a good place to start. It is also a good idea to check job listing like business websites, as well as checking in on relevant forums, and keeping active on social media.