By PaperRocket Accounting, Aug 17 2017 05:00AM
There are now more people than ever before deciding to join the contracting world and when you consider the numerous benefits associated with this method of working it’s no surprise to see why!
As a contractor you will have a lot more freedom and flexibility, gain a wealth of skills and experience by working for various clients in different industries and you will have the opportunity to potentially earn more than a permanent worker in the same role.
There are of course some challenges that you may come across by being your own boss, with one of the main ones being that you will not be entitled to the same benefits as a ‘permie’ worker, such as holiday and sick pay.
Although this may be a concern to many people who are deciding whether they want to take the leap into self-employment, you can cut some of the risk by ensuring you are organised enough to work around the issue.
Managing your cashflow when taking holiday
If at all possible, try to plan your time off as you would if you were a permanent worker by giving yourself a set amount of weeks that you will use as holiday.
By doing this you can then calculate a rough estimate of how much you could potentially earn on an annual basis and then ensure you budget to make up for the loss of earnings while you’re not working.
When it comes to taking time off remember to keep your clients in the loop by giving them at least a month’s notice if possible and try to complete any outstanding projects that you have promised to them. It may also be worth finding out if they need you to carry out any extra work before you go away.
This is a great way of showing clients how reliable and professional you are – which will hopefully result in them having more trust in you and your work so that they are more likely to want to use your services again.
One of the best things about taking holiday as a contractor is that you are able to take as much time off as you want – unpaid of course, but you are in control of when and how long you have holiday.
There will be certain factors to take into consideration – for example, should you only be working a short contract for a client (a month or less), it’s probably best to avoid taking holiday during this period. First of all the client might not be happy with you taking time off because you are on such a short contract as it is and there’s the fact that showing your full potential over a longer period of time may even help with securing future projects.
Plus, if it’s the only contract you have on at the time you know that you’ll definitely be earning – many contractors will look to book holidays while they are in between contracts instead of turning away work, so that they can maximise their earning potential during the year.
PaperRocket Accounting provide accounting and tax services to professional limited company contractors and freelancers working in the UK.
We offer our clients a choice of four all-inclusive fixed fee monthly packages which cover all of their accounting and tax needs (so no hidden costs or surprise bills!). All of our accounting packages include a monthly subscription for a cloud accounting software subscription provided by the awarding winning FreeAgent.
Each of our clients is given their own dedicated qualified accountant with unlimited access in person, telephone, or by email.
We pride ourselves on our client satisfaction and customer service and were shortlisted as 'Small Practice of the Year 2016' in the AccountingWEB practice excellence awards, as well as FSB Hertfordshire Service Excellence finalists in 2015 and 2016.
To find out how we can help you please get in touch now.