Contracting is a profession that is gaining momentum fast, and has been doing so for the past few years.
With the number of temporary positions available on the rise, and with those working within IT and Oil & Gas sectors especially seeing rapid surges in both contracts and placements, it isn’t surprising that more and more professionals are taking the leap over to limited company trading.
With an influx of personnel entering the contracting market however, it is important that those who are either new to the profession, or have been ‘on the bench’ for some time, appreciates the changes that are taking place. With Real Time Information having recently being introduced, contractors have additional obligations tacked on to their usual limited company duties, and with HMRC’s IR35 legislation forever the subject of florid scaremongering, keeping on top of tax status is more important than ever.
Crunch Accounting’s Jonathan Norris highlights the potential challenges that contractors face in these changing times.
"Given PAYE hasn't seen any major changes since its introduction in 1944, RTI was always going to be a big deal. Rather unfairly, RTI impacts limited company freelancers and contractors just as much as a large multinational, leaving one-person businesses with a maze of red tape to deal with.”
Becoming a contractor often shocks previous PAYE employees with the amount of responsibility and pressure that limited company owners are put under. The dreams of fewer hours and longer holidays are soon brought back to reality when the potential tax and legal pitfalls are realised, and burdens such as contract compliance and insurance are taken into account.
There are ways in which contractors can keep on top of their finances and legality issues however, specialist service providers exist who are well versed in the many trials and tribulations that modern day contractors face. Whether it is tax advice regarding IR35, or general finance and insurance queries, contractors can be armed and ready to overcome any professional barrier that they may be faced with.