Don’t be deterred by those negative contracting myths

You might imagine that as accountants for contractors, it is in the interests of Freelancer Accounting (http://www.freelanceraccounting.com) to persuade you of the merits of becoming a contractor or freelancer. However, it is also true that we make it our business to prepare contractors for many of the potential accounting and taxation pitfalls that may face them – so we’d like to think that we can present a truly balanced and critical view of this particular means of working.

As part of this, we’d like to emphasise some of the aspects in which the downsides of contracting can be perhaps too strongly asserted. Such exaggerated or even non-existent ‘truths’ can include...

 A lack of income compared to permanent work

Employers appreciate the flexibility of taking on freelancers and contractors on a project by project basis, and this is actually frequently reflected in the financial rewards. If you have a skill set that is in particular demand, you could as much as double or triple your present take home pay.

There are, however, certain factors that could impinge on your annual earnings as a contractor, such as gaps between contracts and the ever-thorny issue of IR35. However, becoming more professional in your pursuit of contracts and engaging specialist IR35 accountants are effective ways of tackling these respective issues.

It’s difficult to keep your skills up to date

While it may be true that as a contractor, you are not being constantly sent onto new training courses by your boss, the fact that you are your own boss simply leaves you with greater responsibility in this area.

With no need to ask the boss for permission, contracting gives you the freedom to search out and enrol on as many courses as possible, in addition to buying training materials and books and applying their lessons. There’s therefore no reason why keeping your skills up to date should be any more of a chore for you, a client of one of our accountants in London, than it would be for a permanent employee.

You don’t get sick pay, health insurance, holidays or a company car

This may be true, but your status as your own boss does give you the freedom to buy such benefits as you may require, and to bear them in mind in your negotiation of contracts. If you are concerned about possible long-term sickness, for example, health insurance is available at competitive prices while you are still well.

Setting up a company and doing the accounts is a hassle

Those looking to become a contractor for the first time can opt for limited company formation or even joining an umbrella company, and neither arrangement involves a great amount of hassle. The administrative burden of running a limited company is modest, and our seasoned and skilled contractor accountants here at Freelancer Accounting (http://www.freelanceraccounting.com) can certainly help you to navigate those issues that do exist.

Editor’s Note: Freelancer Accounting (http://www.freelanceraccounting.com) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.