You may be at the point in your career where you want a little bit more from your job, more control of what you do and more income at the end of the month. Contracting fits these criteria, offering you a much more flexible working environment, allowing you to market you and your skills to potential businesses. Making the change is often quite daunting, but with some planning, you may find it’ll be the best decision you’ll ever make.
Brookson brings you some helpful advice on being new to contracting and how it’ll benefit you.
Know Your Skillset
It’s important when you’re new to the world of contracting to evaluate yourself and the skills that you possess. What’s different from permanent employment at a typical 9-5 job is that as a contractor, you’re putting yourself and your skillset on offer to potential businesses. Your skills and expertise are what draws these clients to take you on.
So it’s vital that you assess your portfolio of skills and be clear what your specialty is, which you can then pitch to potential employers. Research the market beforehand to see what’s in high demand in the industry by getting in touch with friends and former colleagues over social platforms such as LinkedIn. It’s a great way to keep your eyes open on what businesses are in dire need of, allowing you to hone your skills accordingly.
Once you’ve identified the skills you’re looking to promote, ensure that you get up to date with the latest practices, techniques, and technologies associated with your skills. That way, when you get your first contract, you can hit the ground running as you’re expected to. Clients will expect you to quickly adapt to the job and will not appreciate taking time on the job to get up to speed.
Educate Yourself on Contracting
Although getting a contractor accountant will make this much easier, it’s always a wise move to get to grips with contracting specific laws and legislation. This doesn’t mean reading pages and folders worth of legislation that you’ll most likely forget, but to understand how the law changes when you switch to a contracting job and how that may affect you.
Legislation such as IR35 can affect your financial earnings if not properly addressed. Not to worry as a specialist contractor accountant will have dealt with IR35 many times over and will be able to help you along the way. But understanding the bare bones basics of IR35 and what it envelops will help you not get caught by it at the end of the year.
Limited, Umbrella or Sole Trader?
Although it may be confusing, choosing between Limited, Umbrella or Sole trader, they all have advantages and disadvantages depending on your current circumstance. Many people, when starting out in contracting, will be working for an Umbrella payroll company. As it gives you the freedom of being a contractor but also the convenience of being an employee. With less control than working as a Limited, it requires less financial paperwork and leaves that to the umbrella company itself. Ridding you of the IR35 issue altogether, working under an umbrella allows you to focus on the business side, prioritizing clients over tax.
Once you become more accustomed to accounts and taxes, you’re then able to make the choice of working as a Limited company or Sole Trader where you have a greater control but also a larger responsibility when it comes to the end of the financial year.
When you’ve prepared for the transition, Contracting can become an excellent career move. A move where you’ll be wondering why you didn’t make the move from permanent employment sooner!
- Choosing the Legal Structure of Your Business
- Who Owns the Copyright of Work Created by a Contractor?
- Step-by-Step Guide to Becoming a Contractor
- Allowing Other People to Use the Name of your Company as their Own
- How to Change Business From Sole Proprietorship to an S-Corporation