DEV Community

Discussion on: Those of you who've worked as a contractor and as a full-time employee, which did you prefer?

Collapse
 
moopet profile image
Ben Sinclair

Not being involved in politics sounds like a really good deal.

Personally, I've not worked in too many places where it's been a problem, but when it has... it has!

Collapse
 
aarone4 profile image
Aaron Reese

Absolutely nailed it. You are being paid a premium for your knowledge and opinion so people tend to listen to you. plus you don't generally get involved in the power politics.
The UK tax authorities are really coming down hard on contractors with an assessment scheme called IR35 which is a series of contractual tests to see if what you are doing is disguised employment
1) use of own equipment
2) right to substitute worker (i.e. are the paying for you or your output)
3) who carries the risk for over-runs
4) autonomy of hours
And a couple more.
If are caught inside IR35 then you get very few of the tax benefits of running your 'business' through a limited company: lower payroll taxes writing off capital expenditures etc, but you still have all the overheads like insurance and filing fees. In addition most IR35 contracts are managed through an umbrella company who take your charged hours and calculate your payroll deductions and pass on the remainder and charge you £25 a month for the privilege, plus every company has to do electronic tax filing so you have to have one of the online accounts systems like QuickBooks, Xero or freshbooks which is another £20pm. Along with my PI/PL insurance this means I am paying out around £1400 in business expenses which are not claimable against the IR35 contracts and have to be covered by other income sources. UK contract rates are still significantly higher than payroll but it is not as advantageous as it used to be.
You are also unlikely to get any training so you have to factor in both time and cost to keep skills updated