bitful

Today is the six month anniversary of my switch to contracting. I signed up with an umbrella company that takes care of the administrative and tax issues entirely, for a monthly fee. It is more expensive that setting up my own limited company, but it made sense to me as I was not sure I was going to continue contracting for a long time.

If you think you might consider leaving your permanent position to go solo, here are five reasons why you should - and five reasons why you should not.

The pros

1. More money: higher gross pay than permanent staff doing the same job, and interesting tax benefits and relief, from a minimum of travel and substistence expenses, to ofsetting large and expensive equipment if it is believed to be vital for you to perform your work.
2. Freedom and flexibility to manage contracts around other professional or personal commitments.
3. Acquisition of a varied experience in roles and subject matter as you move from one contract to another.
4. A high level of immunity from office politics.
5. Exposure to advanced technology: innovative projects are often staffed with contractors rather than move permanent workers away from their duties.

The cons

1. No sick pay, holiday entitlement or pension contributions: it is up to you to save up for a rainy day.
2. Very little job security: you can often lose your contract at a moment's notice.
3. More paperwork in filing expenses and tax returns, submitting invoices, chasing payments.
4. More difficulty in securing credit, loans and mortgages as no long-term regular income can be guaranteed.
5. Additional unpaid time spent networking, looking for and negotiating new contracts.

This entry was posted on Thursday, October 19th, 2006 at 9:55 pm and last modified on February 18th, 2007 at 5:23 pm, and is filed under uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.