There are now more people than ever before joining the contracting sector and when you consider the numerous benefits that come with self-employment, it’s easy to see why.
Working as a nurse is undeniably a rewarding career choice, however, as the majority of us are aware, it can also be extremely demanding and exhausting, working countless additional hours and longer shifts than most other professions.
As a contractor, you are able to have more control and therefore potentially have a much better work / life balance than a permanent worker.
Other advantages to being self-employed include:
- Having more freedom and flexibility compared to your permanent counterparts – this means working when you want, being able to choose where you work and taking holiday days as little or as often as you wish (although, just remember that you won’t get paid for this time off!)
- 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 experience could result in your rates being 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 environments.
Starting up as a locum nurse
Once you have made the exciting decision to go self-employed, you will firstly need to decide how you will be contracting.
Some people will decide to start up as an umbrella company contractor to begin with to get a feel of the lifestyle without having as much responsibility, however, you won’t be eligible for as many expenses as a limited company contractor as you are seen as being an ‘employee’ of the umbrella company, which means that your take home pay will be less.
Contracting through a limited company is the most tax efficient method of working and comes with a lot more benefits. As mentioned, you will be entitled to a much wider range of expenses, have more tax benefits and have complete control – it’s also not as risky as many people may think, as you are seen as being completely separate to your business, meaning should the company face any genuine financial difficulty, you won’t be at risk of losing your personal assets.
A basic checklist of what setting up as a limited company contractor:
- Naming and registering your company through Companies House.
- Appointing directors, a company secretary (not mandatory) and shareholders.
- Registering for corporation tax.
- Hiring an accountant, if you so wish, which can be a great help with regards to offering guidance and advice, as well as being able to save you money and ensure important tax forms etc. are filled out correctly and on time.
