A guide for individuals considering working on a contract basis in the future.
Flexible working options have become increasingly popular since the financial recession, with many people choosing to work for themselves or to operate during hours outside of the traditional nine-to-five.
As of June 2014, the UK government introduced new legislation meaning all members of staff now have the right to request to work flexibly from their employer, but the decision as to whether or not this wish is granted remains with the company.
Workers who get their request turned down due to valid business reasons may wish to consider contracting, with figures from PCG showing more than 1.4 million individuals now operate in this way.
But why do they choose to do this? What are the benefits of becoming a contractor? What support is out there?
Benefits of contracting
Many of the benefits of contracting are not exclusive to this way of working, but are also prevalent for freelancers and other self-employed individuals.
Starting with the beginning of the working day, benefits can be seen straight away as limited company contractors are often based at home, meaning there is no commute potentially causing delays to productivity. In addition, with help of a tax calculator one particular benefit of becoming an umbrella company contractor is that the contractor can offset certain allowable business expenses against their tax, maximising their take-home pay.
Contractors may not start at 09:00 like other employees either, as the flexibility of choosing their own working hours is one of the greatest benefits of operating in this way. This means that contractors can work around their busy lives, allowing for a healthy balance between work and other interests.
Having the opportunity to select their own clients and who they deal with on a day-to-day basis is another plus point to contracting, while such workers can also control their workload and take on only tasks they feel passionate about, rather than those assigned to them by their employer.
As contractors are entirely responsible for the work they carry out – often not collaborating with any others to complete tasks or produce pieces of content – they can gain full credit for their role, which is a feeling people working for others do not always get to experience.
This increased element of freedom is what makes working in this way attractive to many, especially among those who have worked in restricted environments in the past.
Becoming an umbrella company contractor
There are few cons to becoming a contractor, but for those choosing to work through the agencies payroll, they are missing out on the opportunity to maximise their take-home pay.
In light of this, choosing to work through an umbrella company like PayStream would be a sensible step. Opting to work with such a service means the contractor becomes an employee of the umbrella company, meaning their income tax and national insurance deductions will be made by PayStream, before being paid their wage.
In addition, one particular benefit of becoming an umbrella company contractor is that the contractor can offset certain allowable business expenses against their tax, maximising their take-home pay.