Contractor News Roundup: July 2020
Recent research from Hays IT indicates that permanent IT staff are dissatisfied with their benefits packages and with their treatment by employers – and are looking at the benefits of contracting instead. This is of course something which existing contractors are well aware of! The knock-on effect of more permanent staff leaving their roles is that a skills shortage will develop – leading to more opportunity for top quality contractors.
Out of the 315 IT staff surveyed, 15% of claim they are ‘very dissatisfied with their benefits package’, with 61% say their employer could be more generous with benefits. 40% report that they never receive a pay review and 35% are not offered a performance review. In addition, the findings show that the majority (84%) of staff want more annual leave, but only 39% receive it – and almost three-quarters (73%) of employees want to take advantage of flexible working, but only 59% are offered it.
Commenting on these results, Andy Bristow of Hays said, “The mismatch between what employers are offering and what candidates consider important shows that many employers are out of touch with the benefits that candidates find useful. Many IT professionals will be looking to take advantage of the more competitive salaries and benefits found in contract-based roles. As more IT professionals switch to better-paid and more flexible contract roles, they may struggle to find people to fill permanent positions.”
These comments are supported by the fact that more than half (51%) of IT contractors earn more than £80,000 per year and 71% earn around £50,000 – which is substantially more than their permanent counterparts. So if you’re thinking about switching from permanent to contracting, now is a great time to find out more about what the financial benefits could be.
As indicated in the figures above, an average contractor rate can easily be double that of a full time employee, or even more. Contractors are paid very high rates due to their skills, the flexible nature of the relationship and the fact that many positions can be relatively short-term. Depending on your individual skills, the state of the industry in which you work (or the market in general) and the location of a contract, you can command very high rates of pay – and, as a contractor, you will be paid for every hour that you work, as well as having the opportunity to work overtime at very good rates. You can also offset all of your business expenses against your income to further reduce your tax bill.
Please see our 1,2,3 Guide to Going Limited. Contracting through your own limited company is the most tax efficient way possible and isn’t as hard or time consuming as you might think. If you operate through a limited company you have far better tax planning opportunities which can reduce your overall tax burden and increased your take home pay. Forming your own company just takes five minutes. To form your company please visit our company formation page, or for more detail on the financial benefits of contracting through a limited company, have a look at our pay less tax pages.
For more details on the benefits of contracting, please visit our useful guide. Basically, they boil down to more money, greater flexibility, increased freedom, wider skills development and an opportunity to be seen in a different light by a potential future employer, that is if you ever wanted to go back to the world of permanent employment. Having said that, there really isn’t such a thing as a ‘permanent’ job or a ‘job for life’ any more, and many believe that a six or 12 month contract actually offers as much, if not more, job security than a new permanent position within a company.
SJD Accountancy are the UK’s largest specialist provider of fixed fee, limited company accountancy services to contractors and freelancers; we’ve been acting for contractors across the UK since 1992, have more than 10,000 clients; are the only National specialist firm of accountants with offices in all major UK cities; are the most recommended accountancy firm on the internet and have more qualified staff than any other specialist firm with qualifications from the following major tax and accountancy bodies – ATII, ATT, ACCA, CA, ACA, FCCA, ACMA.
At SJD Accountancy you will get an accountant from a large, respected and award winning firm, who will take time to get to know you, always take your calls and provide you with prompt and professional advice. We’ve banned voice mail and you’ll never be asked to press one for this or two for that.
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If you have any questions about contracting or would like any further advice please contact our New business team on 01442 275789 or email email@example.com.
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