If you’re a skilled worker, people and businesses want to use those skills. While most people provide these services through full-time employment, being skilled gives you the opportunity to go it alone by starting up business as a contractor.
But, as with all things in life, contracting has its good and bad parts.
To help you decide if starting up as a contractor is the right career move for you, we’ve listed everything good and bad about the contracting life.
We’ll leave the best ‘til last and start with the bad aspects of contracting.
The contracting life is bad because…
…work won’t be handed to you on a plate
When you’re a full-time employee, you just have to turn up for work and know exactly what you’re doing. It’s different for contractors. You’ll have to find clients before you can start working. Not everybody can handle the stress of not knowing when the money will come in.
…you’re on your own if anything goes wrong
Contractors only get paid if they’re doing work, so you’ll probably need to save your money for if you fall seriously ill.
…you’ll need to work out what skills you need to train for
This is also in the “good” section because it does have its positives, but you’ll need to be proactive in working out what skills you need to develop to keep your contracting business growing. There’ll be no employer telling you what to do.
…you’re actually running a business
You might think it’s easy being your own boss with nobody to tell you what to do, but there’s still the taxman and HMRC with a strong interest in you. That’s because they see contractors as businesses, albeit one with only one employee, but a business nonetheless. That means you’ll need to spend some time on administration and making sure you keep financial records.
…you’ll need to be familiar with IR35 rules
If there’s one thing we’ve learnt as accountants, it’s that IR35 rules are anything but fun.
Contractors receive tax benefits, and HMRC is keen to stop employees claiming to be contractors in order to receive the benefits.
You’ll need to follow the confusing rules laid out by IR35 to prove that you are actually a contractor – get an accountant to help you.
And now for the good bit:
The contracting life is good because…
…you can earn more money
This one is first because for most people, the amount of money they are getting paid is one of the biggest deciding factors when deciding on a career move. Luckily for contractors, contracting gives the opportunity to earn more money than a full-time employee.
…your life will just be better
Being a contractor means being free. Okay, you’ll actually have lots of bosses to keep happy (i.e. your clients) but as you become more experienced, you’ll have more choice in who those bosses are, and get to turn down work if it’s really not your cup of tea.
That means you get more time for holidays and time to spend with your family (or you could take on more work if you don’t like them very much).
In other words, most contractors are happy people.
…you’ll have a more interesting life
As your contracting career flourishes, you’ll have plenty of clients. They’ll all have different jobs for you and different expectations, with is great for you, because your working life will be filled with variety – you’ll never be bored.
…you can wave goodbye to 9-5
So you might occasionally have to work 9-5 as a contractor, but most of the time you won’t because unlike full-time employees who have to stay in work for set hours, you can leave as soon as you’ve finished the job you were paid to do.
…you decide when and how to better yourself
Imagine being stuck in a job you hate, unable to get a promotion because you don’t have the skills for it. And what’s worse, your employer is unwilling to pay for the training you need.
As a contractor, you have the sole responsibility and freedom to get the training to develop the skills you need to expand your list of services and earn more money.
Is contracting right for you?
If you’re the right sort of person for contracting, it can be a very rewarding and lucrative career. However, it’s not for everyone – hopefully reading the pros and cons of contracting will help you decide whether you should move from full-time, permanent employment to being a contractor.