Contract work is increasingly common in a number of sectors, including marketing, IT, and project management. But what does are the benefits of contract work, and how does it compare with permanent employment?
Contract work is when an individual is contracted to perform services for a client for a specified period, whether that’s a few weeks or a few months. It’s a popular way of working in fields like copywriting and IT consultancy.
Unlike permanent employment, contract work is relatively flexible for both employer and worker. Contract workers may work with a number of different firms every year, on a range of different projects. While the variety can appeal to contract workers themselves, employers often value contract workers because they can bring specific skillsets to individual projects, and because it can be a more cost-effective way of filling gaps without increasing headcount.
So you’re thinking about taking on contract work – but what are the advantages and disadvantages?
If you’re considering taking on a temporary contract, or if you’re weighing up the benefits and drawbacks of contract and permanent work, there are some important factors that you should bear in mind.
If you’re considering starting contract work, it’s important that you understand the potential tax implications.
To begin with, it is likely that you will be treated as self-employed, meaning that you will have to look after your own tax affairs.
However, contract workers should make themselves familiar with tax legislation called IR35. This is designed to combat ‘disguised employment’ – that is, when an individual is to all intents and purposes employed, but is considered self-employed by the employer.
Falling foul of IR35 can cause serious financial headaches for contract workers, and it’s important that you take steps to avoid it, particularly when drawing up contracts. You can read our comprehensive guide to IR35 for more information.
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