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There are significant advantages in becoming a contractor or freelance services provider for a client compared to being an employee and it is therefore not surprising that there has been an increase in the number of people taking up these types of roles. More flexibility and control over work/life balance, a likely increase in earnings and depending on where you work tax break benefits.
So there are considerable benefits of becoming a contractor and it’s clear why a significant proportion of the workforce have moved into the contracting sector. If you considering the move into contracting then here are a few tips to get you started.
Obviously, if you’re intending to contract your services in your home country then your right to work is a mute point, but one of the significant potential benefits of contracting is the possibility of working in a different country. However you need to make sure that you have permission to work in the country if you are looking to work overseas.
It’s important to do your research on the country that you’re intending to work in and what their work permit or visa requirements are. Depending on which country it is, this can be straightforward or a lengthy process.
This is where working with an agency can be helpful as they can give guidance on the likely requirements although usually the agency will require information from you to ascertain that you have permission to work in that country.
So how will you get paid? Obviously the important bit! The good news is that there are few different options for you in regards to getting paid as a contractor. There are advantages and disadvantages to each one and you need to make sure that you select the one that is most appropriate for you and your situation and most importantly ensure that you are compliant with any tax or payment laws:
Typically, there are four options for payment solutions that are compliant:
The right option for you will depend on your confidence to understand the tax regulations in the country that you will be working in. Make sure that you are compliant from the beginning of your contract and this will help you avoid any unwelcome charges later on.
Moving into a interim professional or contractor role will definitely involve more administration work for you compared to permanent employment and therefore it is important for you to be prepared for this especially if being organised isn’t your strong suit.
It may be that you are working independently on a contract and therefore your client needs to be able to trust you that you can work to the required deadlines. This is especially true if you are working from home or another remote working area and therefore not directly visible to the line or project manager.
The final aspect is the situation with the taxation. Typically, the taxation is based around the country in which the contract or project will be based in regardless of your nationality. It is essential that you understand the different tax rules and regulations for the country that you are working in.
Most countries have different levels of taxation as well which adds further complications. The UK has up to 4 different types of taxation depending on how you work your payment solution.
There are some great resources out there to understand the tax requirements and your recruitment consultant should be able to give you some guidance on the most appropriate resources for your particular situation. However to save you an unwelcome and potentially costly charge further down the line, make sure that you do your homework on this topic.