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First Time Contractor - Thinking of Becoming a Contractor

Why go Contracting?

With all the attractive benefits, as mentioned below, who wouldn't want to become a contractor? Indeed the prospect sounds good and becoming a contractor can definitely be a viable alternative to permanent work. Making the transition from permanent work to contracting is not really that difficult and with the help of the right professionals, the transition is often seamless and efficient. However, you have to remember that not everyone will be able to make things work as a contractor which is why you need to take into account the pros and cons before making your decision.

Advantages and Benefits of Contracting

  • Earn more money
  • This is one of the main reasons that people decide to start contracting because they can earn substantially more then they can if they were a permanent employee.

  • Minimise your tax bill
  • By taking professional advice from Aidhan Accountancy you can significantly reduce your tax bill and maximise your take home pay. Coupled with higher gross income this is a win-win scenario for contractors & freelancers.

  • Freedom/flexibility
  • Becoming a contractor essentially means that you are your own boss and therefore get to decide what jobs you want to undertake, when you want to undertake them and if you feel like it you can take a holiday when you want to.

  • Variety
  • You have the flexibility to work in different companies and job sectors, developing your knowledge and experience as well as enhancing your CV.

  • Avoiding career politics
  • Essentially this is a key decision maker for many who choose to switch to contracting. Bureaucracy and politics in their permanent place of work can be draining and demoralising. Contracting allows individuals to be judged on their talents, merits and productive output, not whether they are political animals or not!

Disadvantages of Contracting

  • Finding enough work
  • As a contractor you need to market yourself if you want to find enough work because you are everything. Nobody is going to feed you with clients and customers but if your work is good then some of your contracts will likely come from referrals.

  • Security and stability
  • Contracting work is not secure in comparison to permanent work and as such you might find that in some months you may not have any contracts at all and in other months you may have more contracts than you can handle. That is simply the nature of becoming a contractor and you have to be able to cope with that.

  • Being your own boss
  • Although it can be an advantage, being your own boss means that everything is at your disposal. You therefore need to know how to manage your finances and make sure you plan when to take your breaks/holidays so you do not burn out.

What’s the Profile of a Typical Contractor?

Actually, there is no such thing as a typical contractor!

However, many contractors share the same traits & characteristics as follows:

  • They are highly skilled
  • They are passionate and dedicated towards what they do
  • They’re ambitious and see making money as a means to greater things in their careers
  • They want to take control of their careers through contracting rather than being allowed to be dictated to through permanent employment
  • They want to do what they enjoy doing and get paid handsomely for it and why not!

If you have any further questions or want some advice please feel free to call us on 0203 368 3173 or email us at info@aidhanfinancial.com.

Aidhan Accountancy

Sutherland House, 3 Lloyds Avenue, London, EC3N 3DS