Working as a Contractor
Advantages of being a Contractor
Before embarking on a contracting career, it is essential to weigh up both the advantages and disadvantages of contracting from both a personal and a business perspective.
- Flexibility: Contracting offers the opportunity to move between various industries and to gain valuable skills and experience without having to give an employer lengthy notice. It also allows a person to carry out the same service for more than one client at a time.
- Experience: Contractors are often more marketable due to their exposure to a wide variety of systems and organisations, which broaden their skills and knowledge base.
- Remuneration: Often employers are prepared to pay higher rates to a contractor than would be paid to permanent employees as the length of the employment is short-term. The employer benefits through savings in sick pay, holiday pay etc.
- Independence: A contractor is his or her own boss, and being self-employed can provide great personal satisfaction and flexibility. A contractor has control over their output from how, when and where it is done to whether they do it themselves or sub-contract.
- Opportunity to work abroad: Contractors who have a few years of varied experience behind them can often market their skills in several countries throughout the world.
Considerations when Contracting
- Exposure: Contractors are more exposed to financial risk than employees. They are ultimately responsible for their work and health and safety and any costs that may be incurred should their work be substandard or faulty.
- Administration: Contractors are responsible for all of their own tax affairs and must ensure that they are fully tax compliant. Contractors must also ensure that they keep proper records of all transactions for Tax and VAT purposes. Contractors are also responsible for their own insurance cover.
- Flexibility: Contractors will often be required to work in continuously changing environments and must be very flexible and adaptable to this.
- Job Security: Contracts are often for short periods of time ranging from two months up to one year.
- Limited Benefits: Contractors do not receive the same benefits as an employee such as pay-related social insurance, sick pay, holiday pay or professional training.