Contractors

If you work for someone for a fixed period, or for the completion of a particular project, then you are probably a Contractor.

There are many advantages to becoming a Contractor compared to being employed, but it is not right for everyone and you need to carefully consider the options before making a decision. Many businesses like to use contractors due to the flexibility they provide; they can hire you for short periods of time, can hire in specific skills or demand working hours a normal employee simply would not accept.

 The Benefits to You

As you will be working for yourself, you can enjoy all the benefits of being your own boss. You will also have the flexibility to work to suit yourself eg. you can choose your working hours and holiday entitlement.

Being a Contractor can be financially rewarding, although rates do vary depending on your skills. As businesses will not be paying pension contributions, holiday and sick pay, national insurance etc, they will tend to pay higher rates to compensate. Because of this, and the short term nature of the relationship, you will often earn considerably more than permanent employees doing the same work.

In addition, provided the nature of the contract is appropriate, your overall tax liability can be smaller, particularly if you contract through your own limited company. Furthermore, many business expenses can be offset against income to further reduce your tax liability.

As you only work on individual contracts for relatively short periods of time, you will quickly gain a variety of experience and contacts which will add to your skill base and help you to gain new work.

If you fancy working abroad, contracting is a possible way of achieving this.

Finally, if it turns out that contracting isn’t right for you, there is nothing to stop you becoming an employee again and the experience gained could hold you in good stead in your future career.

The Disadvantages

Being a Contractor can be tough and is not right for everyone.

The biggest drawback for many people is that there is less security and a greater degree of uncertainty. Contractors have less rights than employees, so it is easier for businesses to terminate their contract, and they are often the first to go when times are hard.  Even if this doesn’t occur, there is always pressure to find new work when a contract comes to an end, and you will not be paid for holidays or if you are ill.

You will also be responsible for the administration associated with managing your finances. You will need to be comfortable with negotiating each contract and will need to complete various forms, as well as manage records of expenses, income etc. Monahans will be able to help make this as straightforward as possible.

Finally some people do not like the fact that you are on you own. You may be treated as somewhat different by the regular employees and as a one-man-band you may not have colleagues to discuss issues and problems with, or simply to socialise with.

Monahans have a dedicated team of specialists looking after the affairs of Contractors and can advise on all aspects of becoming a Contractor. Or if you are already a Contractor and need an Accountant to help you manage your affairs as efficiently and profitably as possible, we have the knowledge and expertise to do just that.

Contact our Contractor Team via this link if you would like a friendly chat about how we could help you.

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