There are now almost 4.2 million contractors in the UK according to the Office for National Statistics (ONS,) and this is the highest level in over 20 years.
More and more people are going solo and becoming self-employed. Recent economic times have resulted in many redundancies across the country and the tax efficiency is a very viable option to being in full-time employment.
However, there are a number of aspects that you should consider before making any hasty decisions. The last thing anyone should do is just quit their permanent job in favor of becoming their own boss, without undertaking proper research beforehand.
A flexible schedule is inviting, but try not to make any hasty decisions without checking out the 5 tips below before starting as a contractor.
- Spontaneity
One of the great aspects of being self-employed is that there is a level of unknown. Will you have an income next month? There is no fixed answer, only a prediction, so you need to make sure you can deal with spontaneity and inconsistency. If you do like having a structured routine, then perhaps permanent employment is more ideal for you.
- Uniqueness
Are you desirable? You are in charge of securing work so you need to be able to network and make contacts. Have the right unique skills which will make you marketable and stand out from the crowd. Do all you can to have the right qualifications and experience, and make your CV award-winning.
Ask your family and friends what makes you different and then play on your strengths.
- Tricks of the trade
You will need to know where to go to find work. You can look online at sites like Contractjobs.com, which feature temporary jobs for contractors; or alternatively you can turn to social media platforms and networking events. Really build up a strong book of contacts that can spread the word about you; word of mouth is still the most cost-effective marketing technique.
- Tax affairs
Whereas before your employer would be in charge of your own tax affairs, you now need to manage your own tax affairs and file your own self-assessment tax return. There will be expenses and allowances which you can claim back so you need to handle all the paperwork including receipts, and complete all forms for HM Revenue & Customs on-time to avoid penalties.
If numbers have never been your forte, it is advisable to hire a freelancer accountancy firm.
- Law compliant
When you become self-employed, there will be specific legislations that you need to adhere to such as health and safety and insurance. But whatever industry you work in, one of the main pieces of law which you need to be compliant with is IR35. The implications can have a damaging effect so you need to make sure you are above board and meeting the requirements. Â
Follow these 5 must-know tips to start your career as a successful self-employed contractor.
This article was provided by Nixon Williams accountants, specialists in freelancer accounting services across the UK.