The benefits of becoming a contractor

If you are thinking of becoming a contractor, but aren’t exactly sure of the benefits behind leaving behind your permanent job, you are in the right place.

We have a wealth of experience in contractor accountancy and have broken down the key lifestyle and financial benefits that are available to contractors. In a nutshell, everything boils down to more money, greater flexibility and increased opportunities for development.

Many companies are starting to reduce employee benefits and is there really such a thing as a permanent or ‘job for life’ anymore? With this in mind, now is the perfect time to consider taking the next steps to becoming a contractor.

The financial benefits of becoming a contractor

One of the first things that will pop into anyone’s head when they start thinking about becoming their own boss is the financial benefits that come hand in hand. These are obviously extremely compelling and some of the key financial benefits that you can expect are:

  • You can offset any business related expenses against your income to reduce your tax bill
  • The average contractor rate can easily be double that of a permanent person of the same position with a similar skillset.
  • If you are contracting in an area where your skills are hard to come by, you could command an extremely high rate.
  • Contracting through a limited company can enable you to retain up to 80% of your income

These are just some of the financial benefits that you can enjoy as a contractor, our expert accountants will be able to discuss them in more detail with you, call 020 7481 4743 and we will be happy to help.

The flexibility of becoming a contractor

We have covered the financial benefits of becoming a contractor, but another draw of the life of a contractor is flexibility. As a contractor you are effectively your own boss and with that comes a lot more flexibility than you would have enjoyed as a permanent employee.

Here are a few examples of the flexible nature of the life of a contractor.

  • You have the freedom to choose which jobs you take.
  • You can work the hours that you agree with the client.
  • There is no set amount of holiday you can take each year
  • Contract roles give you more flexibility over the payment terms and working conditions that you negotiate.

Developing your skills as a contractor

A common misconception that many people have of contracting is that it is harder to develop your skills, especially if you are working in isolation; this couldn’t be further from the truth! In actual fact you will be working with a variety of different companies and this will help you to greatly develop your skills, for example:

  • You’ll have the chance to test out a number of different industry sectors to widen your experience and make you more of an “all-rounder” within your niche.
  • You’ll be able to attend training sessions and offset the cost against your tax liability.
  • Carrying out a variety of projects for different companies gives you the opportunity to learn on the job and expand your skillset.
  • All companies are different and they’ll be working with different products and internal software. As a result you’ll be able to add experience with these on your contractor CV and become much more attractive to future clients.

As you can see, there really are countless benefits to leaving behind the life of permanent employment and becoming a contractor. That being said, we pride ourselves on being a transparent firm of accountants and of course there are some drawbacks of being a contractor, for example:

  • Not having traditional colleagues can be tough for some people if you are used to such an environment and you might find yourself working in isolation frequently.
  • You won’t get the same perks that are available to employees e.g. holiday and sick pay.
  • Contractors are responsible for managing their own finances, but a good accountant can help with this.

If you are ready to start your career as a contractor, the next steps are to call our friendly accountants on 020 7481 4743 and we can help to get your limited company setup in 24 hours.

Now that you know the benefits of contracting and have got a brief insight into the life of a contractor, you might also benefit from reading these useful guides.