Tips for first-time IT contractors going it alone

Thursday 11 June 2015

Becoming an independent contractor in any industry can be a nerve-wracking experience, but being prepared is half the challenge. With this in mind, Computer World UK put together a handy guide to some of the things people should look out for when they go it alone in the IT industry. Let's look at some of the tips that it imparted onto those starting a new business.

Become fully registered and legally compliant

Setting up a limited company is an attractive prospect for many IT professionals and to do so, it is important you pass on the correct information to HM Revenue and Customs (HMRC) within three months of starting up. This is when sole trader accounting services may come in very useful, as few people who have been full-time employees in previous jobs have experience in this field.

Understand the changes

Working for yourself it will be your responsibility to keep up-to-date on any changes in the industry or tax law that will affect you and your business. For example, IR35 legislation is being reviewed and is therefore likely to change. Ignorance is not an excuse for failing to comply, so be sure you keep on top of any changes or employ someone who knows the system well to do so.

Ask for help

Carrying on from the previous point, there is a lot to be said for recognising when you can't do something yourself. Try and ascertain this early on in a task, as spending hours working on something that isn't your area of expertise will only take you away from the IT jobs that you are supposed to do for a living. Pass the task onto a specialist and focus on your own aims as a businessperson.

Weigh up the tax liabilities with working overseas

There has long been a lot of money to be made by taking up IT jobs overseas in the likes of the USA and Asia. This will only be profitable if you have worked out your tax liabilities and carefully negotiated a salary that covers these without eating into your income. Length of time working and claiming money back on the likes of hotel stays must be considered, so think carefully.

Get organised

There is no substitute for getting organised when you run your own business and failing to do so could end in disaster. This ranges from everything including work schedules for clients right through to your tax self assessment. As the buck stops with you, it's time to get on top of everything and make it flow properly.

By Victoria McDonnell

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