The biggest mistakes a contractor makes!
We all make mistakes in life: it is part of being human. The trick is to embrace those mistakes when they happen, learn the lessons they teach us and be better the next time. That is the only way to become truly successful. So, with that in mind, here are some of the things that most contractors could do a whole lot better:
- Assume that you are operating outside of IR35: Being unaware of the full implications of IR35 or simply ignoring it and hoping HMRC will not notice is a foolish strategy. Far too many people have been caught out by this expensive mistake and ended up regretting not finding out first. The say hindsight is a wonderful thing… when often hindsight is just an expensive thing.
- Get too rigid and set in your ways: As a contractor or freelancer, you often work for one client for an extended period; but by its nature, contracting means that your work could be cut short at any time. Things can change quickly in bigger businesses, and it is far easier (and distinctly cheaper) to stop a service agreement than to terminate a full contract of employment.
- Stop looking for opportunities: An employee is typically looking for a job for life, or at the very least for the foreseeable future. Freelancers and contractors choose the lifestyle because they have flexibility (and the potential to earn more money). So, to make the most of your opportunity you need always to be on the lookout. Maybe there are better opportunities on the site you currently work at, or you might hear of rumours of work elsewhere – be ready to move when the time and offer is right. Don’t just wait for the agency to call.
- Rest on your current level of expertise: It may be that you are the best in the marketplace at what you do, that your competition simply can’t compete with your expertise and that your skills are always in high demand. But that was yesterday! We live in the fastest-moving, technology-driven age of all time and there is barely a marketplace or industry on the planet that is not touched by the technology phenomenon. So while you are working for one customer: do try and keep up with the rest of the world.
- Say goodbye to sick pay and healthcare: Most companies would provide their employees with some sort of benefits package but, as a contractor, you are clearly not entitled to those sort of luxuries. But there is nothing to say that you can’t provide your own cover. Many companies specialise in providing benefits packages for contractors and freelancers with things like healthcare, key man insurance and sickness cover if you are unable to work.
And the biggest mistake of all is…
Not using a specialist contractor accountant to help you make good choices, keep your tax and other costs to a minimum and take away most of your admin with software like FreeAgent. If you would like more advice about the dos and don’ts of successful contracting, please get in touch with the team.