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

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From pcg.org.uk, the association
supporting freelance contractors

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

Posted May 19, 2009

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 permie.
- 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

Please scroll down for related articles

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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 :: What is IR35?
An overview of the notorious IR35 tax legislation. What contractors need to do to avoid the IR35 trap, and what if you're caught by the IR35 rules.

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

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 :: Contractor umbrella companies
How contractor umbrella companies work, and how to choose the best scheme for you.

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 :: 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 :: 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 :: 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 :: 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 tax and accounting
Overview of the taxation and accounting requirements for IT contractors working via a limited company or umbrella company.

Start-Up Guide :: Finding and securing IT contracts
Once you have decided that IT contracting is the life for you, the next step is to find your first IT contract.

Start-Up Guide :: Before you start contracting
If you're thinking about becoming an IT contractor, it's worth taking some time to go over what is involved before taking the leap into the contracting world.

How to become an IT Contractor - Becoming an IT Contractor