Start-Up Guide :: Pros and cons of IT contracting

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Start-Up Guide :: Pros and cons of IT contracting

Posted Dec 20, 2010

Following on from our overview of the risks and rewards of contracting, we take a further look at the best and worst things you commonly associate with IT contracting.

Pros of IT contracting

- Potential to earn more income than a permanent employee.
- Far more freedom to control what work you do.
- Chance to experience wide variety of projects and industries.
- Chance to learn cutting edge skills on many projects.
- You are less likely to be embroiled in office politics (although this isn't always the case!)
- You can take planned breaks between contracts to travel, spend time with the family, etc.
- You have greater responsibility for your own financial planning, especially if you run a limited company.
- The independence contracting affords is a good confidence builder.

Cons of IT contracting

- Lack of job security (especially during 'tough times'). But then again, many permanent jobs aren't really secure.
- You only get paid when you actually work - no holiday pay, sick pay, or other benefits.
- You may have less choice of where you work, and may have to travel more to secure contract work.
- You will have more paperwork to deal with (if you have a limited company).
- You will have to negotiate punitive tax laws, particularly IR35.
- You may have to deal with occasional permie conflict.
- You may need to develop additional sales and networking skills to help secure fresh contract work.

For most contractors, the pros of IT contracting nearly always seem to outweigh the cons. If you've already decided to become a contractor, chances are you have the temperament to take a chance and take control of your own career.

Others simply aren't cut out for the uncertainly contracting can bring - especially in tough economic times, and prefer to return to permanent work.

Here are some further 'Start-up guides' on the site which may help you decide if contracting really is the life for you:

Further information

- Risks and rewards of IT contracting
- IT contractor success tips
- Contractor recession survival tips

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Start-Up Guide :: How to become an IT contractor
Once you have decided that IT contracting is something that you would like to do, there are a number of stages you will need to negotiate before starting work on your first contract.

Start-Up Guide :: Contracting via a limited company
How a contractor limited company works, and how to decide if its the right structure for you to trade under.

Start-Up Guide :: What is IR35?
An overview of the IR35 tax legislation. What is IR35?, and what contractors should do to ensure that their contracts are not caught by the IR35 rules.

Start-Up Guide :: Contractor umbrella companies
How contractor umbrella companies work, and what to look out for when choosing an umbrella scheme.

5 tips for IT contractor success - Part Two
More tips for contractor success in 2011, from dealing with permies to deciding upon a business structure.

5 tips for IT contractor success - Part One
If you are considering becoming a contractor, or are a seasoned veteran, here are 5 success tips from the Contract Eye team to help you get the most out of contracting in 2011.

Start-Up Guide :: Pros and cons of IT contracting
We look at the main positive and negative aspects of being an IT contractor, from the greater freedoms it brings, to the lack of security you might experience.

Start-Up Guide :: 10 contractor success tips
Ten tips for IT contractor success: From having the right skills, to gaining contract renewals, and keeping on the right side of IR35 and the tax man.

Start-Up Guide :: Business banking for contractors
If you are setting up as a limited company contractor, one of the first things you need to do is to open a business bank account.

Start-Up Guide :: Risks and rewards of IT contracting
What are the risks and rewards of becoming an IT contractor - the potential to earn more money and freedom versus risk.

Start-Up Guide :: Limited or umbrella company?
Which trading structure should you use when you start our as an IT contractor - limited company or umbrella company?

Start-Up Guide :: IT contractor insurance
What types of business insurance cover should IT contractors consider taking out?

Start-Up Guide :: Contractor recession survival tips
With rates on the slide and the number of contract openings shrinking, what can IT contractors do to ensure they get through the current market downturn intact?

Start-Up Guide :: Negotiate your IT contract rate
Once you have been offered an IT contract, you will need to negotiate both the rate you will be paid and consider the implications of IR35 before signing any contract.

Start-Up Guide :: Contractor accounting & tax
Overview of the taxation and accounting requirements for IT contractors working via a limited company or umbrella company.

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How to become an IT Contractor - Becoming an IT Contractor