{"id":401,"date":"2018-03-15T20:21:20","date_gmt":"2018-03-15T20:21:20","guid":{"rendered":"http:\/\/talentedtester.com\/?p=401"},"modified":"2018-04-09T07:24:34","modified_gmt":"2018-04-09T07:24:34","slug":"many-years-experience-contracting","status":"publish","type":"post","link":"http:\/\/talentedtester.com\/many-years-experience-contracting\/","title":{"rendered":"How Many Years Experience Before Contracting?"},"content":{"rendered":"

The contracting sector is evolving at a tremendous rate as more people realize the benefits of versatile working. With the demand of a contingent workforce tremendously increasing, there has never been a better time to become a contractor. But the question on how much experience is needed to become a contractor is something that almost everyone has asked during their initial stages of contracting.<\/p>\n

It is apparently considered that an experience of 3 years is suitable in order to become a contractor. Some people say any earlier is risky to become a contractor<\/a>. But this much information is not enough. In this article, we will consider the most important questions related to contracting and will explain them in a detailed manner.<\/p>\n

How to find contracts?<\/h2>\n

You must have a targeted approach in order to successfully get a contract. A killer\u2019 contractor CV<\/a> is probably the most integral step towards finding a good job. Make sure you CV has information relevant to the contract job being applied for. Make your CV short as well as focused and tailored. An estimated 80% contract jobs are given through agencies, so you must market yourself on the job board using specific agencies. Being noticed and standing out is very important if you want a good job.<\/p>\n

Follow the contract job applications and chase clients. Experienced contractors believe that if you have landed an interview, you often end up getting the job. That is why during initial negotiations, you should focus on getting the interview and not bargain over rates. For clearing the interview, you should make sure you are prepared<\/a>, proactive and understand the issue. Be confident, understand the job and try to close the deal. Having reassured the client at interview, follow up with the agency and there! You got a new contract!<\/p>\n

Do I Require a limited company to contract?<\/h2>\n

Earlier, it used to take weeks to set up a payment mechanism but now it can be done in less than 24 hours by using company facilities and business accounts. The best payment structure depends on your IR35<\/a> status. A limited company might not be the best choice for you in case you are inside (caught) by IR35.<\/p>\n

If you want to contract for a longer term, then a limiting company will provide you tax advantages and flexibility. On the other hand, you should use a PAYE umbrella company<\/a> , if you plan to contract for a shorter time. A limited company provides maximum benefits if you have significant benefits that you need to claim. You should not be opting for these companies in case you do not incur and need to claim many contracting expenses.<\/p>\n

Is it better to work as a permanent job first?<\/h2>\n

One among the main factors that makes permanent jobs<\/a> better than contract jobs is the fact that they provide stability. It is apparently considered that an individual should have at least 3 years of experience before becoming a contractor.<\/p>\n

But there is not hard and fast rule. I personally knew a guy who decided to become a contractor with just 4 months of experience. Permanent jobs<\/a> come along with numerous benefits. Initially, gaining some experience in a permanent job<\/a> can make you feel more confident and strengthen your move towards being a successful contractor.<\/p>\n

Do I get paid with company dividends as a contractor?<\/h2>\n

If you are a limited company contractor, you are likely to decide how or when you pay yourself. If your contract work is not caught by the IR35, most of the limited company contractors obtain income in the form of dividends. Dividends are beneficial because they are not subject to National Insurance<\/a> Contributions (NIC) which allows them to save money.<\/p>\n

But there are certain things that you need to keep in mind. Dividends can only be paid from company benefits. Also, declaring dividends without sufficient profits is illegal. Corporation tax keeps more dividend information within each threshold. It is important to keep the S447 in mind. According to the tax law section 447, employment related securities tend to target employers using contrived schemes to avoid taxes by paying dividends, rather than paying salary.<\/p>\n

Do I pay less tax while serving as a contractor?<\/h2>\n

There are numerous ways through which you can save money by having a  tax efficient setup. Unlike Umbrella Company, a limited company allows effective tax planning through a combination of salary and dividends. You can also claim your business-costs in terms of expenses in order to receive tax relief. In order to save tax, you need to understand IR35. If the contract is caught inside IR35, you can still effectively complete your contract. However, note that there will not be any entitlement as a contractors<\/a> operating outside the IR35. Understanding how to structure your business is just as important as understanding how much to charge<\/a> your clients.<\/p>\n

It is advisable that you keep up with all government schemes as this might enable you to operate tax-efficiently. You might think that hiring an accountant is something that is not required and can be avoided. But an accountant actually helps in saving your money as well as time and stress. Furthermore, you should avoid any kind of penalties and you should take a share of the profit of your company and keep it as pension.<\/p>\n

Pros and Cons of IT contracting<\/h2>\n

The upsides to being an IT contractor can be mesmerising, being your own boss is something most people sitting in a cubicle wish for everyday. <\/p>\n

Being in charge of my own finances rather than remaining subject to a corporation\u2019s view on their employees as production robots with fixed salaries gave me the independence and liberty to not be part of the never ending concrete jungle. <\/p>\n

It can be frightening but moving away from the well known path into IT contracting once done, makes you question why you never did before.<\/p>\n

IT contracting is not for everyone though and needs firm resolve and conviction to make it work. Like everything else, it comes with the good, the bad and the ugly. Here are 5 pros and cons of IT contracting to help you make your decision.<\/p>\n

The Pros Of IT Contracting<\/h3>\n

\"pros<\/span><\/p>\n