Deciding to escape from employment and advertise yourself as a contractor can be very lucrative if you get it right. Get it wrong however and the consequences could be disastrous. If you have decided to set out as an IT contractor, follow the helpful tips below to identify what you need to know before you start out.
Using Agencies
When you first start out as an IT contractor you will probably find that the easiest and quickest way to get work is to go through an agency; however, this should never be seen as a long-term arrangement. You may not earn much more money by dealing with clients directly but you will get more respect as a businessperson and it will be easier for you to look for other business opportunities without being tied to an agency. You should also beware of unscrupulous agencies taking advantage of your knowledge and your contacts.
Be good to accountants and the taxman
For anyone in business, including contractors, it is vital that you have an accountant who you can trust. As an IT contractor you should also make sure he has experience of working with contractors. He will be able to help you if you get into financial trouble and will also be able to assist you if the Inland Revenue begin to investigate you and your tax affairs. The Inland Revenue could be looking at you for a variety of reasons, including taxes on contractors such as IR35 or Section 660, or they may just have randomly decided to pursue you, but whatever the reason for their investigation it is important that you keep in touch with your accountant as he can be a great source of help and support. You can
find out more about IR35 from Brookson.
Be prepared for the downturn
When there is a downturn in the general economy, IT contractors may find that they are at the raw end of it. This might mean a period of time out of work, in which case you should make sure that you have enough money saved to see you through this period and your accountant may also be able to help you to prepare for it. Such economic downturn may mean that you have to go back and look for permanent employment rather than looking for work as a contractor. If this is the case you will benefit if you have been helpful and courteous to the employees at companies where you have been contracting. If you have made a good impression they may be more likely to consider you as a potential employee.
Although these points are mainly things you need to be aware of as an IT contractor, there is no doubt that contracting has many advantages compared with employment. There is the freedom to work as and when you need to and in a variety of locations, as well as the capacity to earn more money than you potentially would as an employee. However, as noted above, there are also some pitfalls to take into consideration, so anyone thinking of taking the step into contracting needs to make a balanced and considered decision.
(This is a guest-post)
