Five things you should know about contracting before you quit your job

(4 minutes to read)

Before you make the decision to join the contracting sector, you need to know a few things first, such as the fact that you will need to adapt to a completely different lifestyle where you could find yourself working home alone for hours on end and having to be motivated and organised with your time and take home pay.

There are more people than ever before in the UK who are choosing to join the contracting sector and with the numerous benefits that come with this method of working it’s no surprise to see why.

What are the advantages of contracting?

  • You have more freedom and flexibility compared to permanent workers, meaning that you can work when you want, can take holiday days as little or as often as you wish (although you won’t get paid for this time off) and you can potentially have a better work / life balance.
  • The majority of contractors can charge a daily or hourly rate much higher than a permanent employee in the same role. Of course, your individual skills and your industry could mean your rates could be even higher.
  • You are able to claim back expenses that are made for the running of your business, which can then reduce your tax bill at the end of the tax year.
  • You will gain in terms of skills and experience by working with a number of clients in various industries.

When it comes to joining the contracting community it’s important that you know exactly what you’re letting yourself in to, as it is a completely different experience to working a 9-5 permanent job.

So before you quit your current role, here are a few things that you need to know:

You might find that you need to keep yourself company a lot of the time

Many contractors will work from a home office and if you find yourself in this situation, you need to know that you could be spending quite a lot of your time alone.

Many people dream of working from home, thinking that you can sit there watching daytime TV, doing a bit of work each day, but the reality is that you do need to be productive with your time and in actual fact, daytime TV can be rather distracting when you need to get on with work in order to earn money!

You do need to be strict with yourself in this situation and give yourself set times for breaks and perhaps even make a list of tasks you need to complete by the end of the day.

It can be lonely working on your own and for some people, that odd phone call and communicating via email is just not enough. There is a solution to this and that is to look for other workspace options.

For example, renting out a co-working space gives you the best of both worlds, as you can be in a working environment with like minded people, but at the same time you are still your own boss.

Of course, you would have to take the cost of renting out such a space into consideration and work out if this is the best option for you.

You are solely responsible for your own success

As a contractor it is entirely up to you to keep yourself motivated and productive, ensuring you’re always looking for that next contract.

This can be pretty daunting knowing that the success of your career or business is all on you and you alone.

But at the same time, when you do conquer your goals, this makes it even more worth celebrating because you have achieved this on your own and that is certainly something to be proud of.

You will have bad days where you are completely stressing out about work, however, those good days will more than make up for it.

Still have questions about contracting?

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You will have a mixture of busy and not so busy days

Another thing that you will have to adapt to when contracting is that you could experience weeks and weeks where you are trying to fit in extra hours of work and are super busy with projects….and then it might just stop for a while.

Suddenly you could find yourself with free evenings and weekends and when that does happen, make sure you enjoy the time because you deserve it!

If you find yourself with more time during the day, try to use this time productively, perhaps networking to find potential clients or working on updating and improving your website.

If however, you know you have another demanding period coming up, why not take some time out to chill and relax before the next storm!

You will need to be organised when it comes to your take home pay

As a contractor you will find that some months you will take home a lot more compared to others and if this is the case you need to be prepared for those times when you will be earning less.

Make sure you have money set aside and on those busier months, pop a bit more into a savings account to ease the stress of those less busy periods.

Remember, as a contractor you won’t get paid for any sick or holiday days, so it’s worth taking this into account when calculating your take home pay.

If you have turned your hobby into a career, you will probably have to find new leisurely pursuits

Everybody needs a hobby – something that they can enjoy doing that is completely stress-free.

The number of people turning their hobbies into a career is growing more and more. Unfortunately, this immediately turns a hobby into more of a duty than a relaxing past time.

Therefore it can be ready useful for you to find something else that you enjoy doing that will help you to unwind, switch off and not think about work!

To find out more about contracting please call Sophie on 01442 795 100 or email sophie.lewis@dolanaccountancy.com.

Why Dolan Accountancy?

Dolan Accountancy was set up by Simon J Dolan, the man behind the well-known brand SJD Accountancy. With over 25 years experience in the contracting marketing, Dolan Accountancy has the heritage, reputation and credibility you can trust. Working closely with our sister company, ContractorUmbrella, it means we can offer one low cost, fixed fee package at £95 + VAT per month. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost. We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours.
  • Free use of ContractorUmbrella – With changes in Public Sector IR35 Legislation we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, ContractorUmbrella.
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams.
  • Free Access to FreeAgent – The founder behind the multi award winning FreeAgent platform was one of Simon’s first clients, therefore it only seems fitting that we offer all of our clients access to FreeAgent, free of charge.
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year.
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status.
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative.
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.

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