Whether you're brand new to contracting or have years of experience behind you, now is a great time for contractors to take stock and determine how to move forward on the best foot in 2023.
To help, Umbrella Search has put together this handy guide outlining our top tips to help every contractor succeed in 2023.
Be in the know about IR35
Whatever stage of your contracting career, it's critical to understand IR35 and how this may impact you.
2022 saw changes to IR35, with former Chancellor Kwarteng's mini-budget, which were reversed soon after by current Chancellor Hunt. For this reason, it's understandable that some contractors may need to learn where they stand regarding the legislation.
So, what is IR35, and how will it impact contractors in 2023?
IR35 was introduced in 2000 to stop self-employed workers such as contractors from operating as 'disguised employees.' In other words, IR35 targets workers that claim to be self-employed but work more like employees to benefit from tax advantages.
Initially, the contractor was responsible for declaring their own IR35 status. However, this changed in the public sector in 2017 and the private sector in 2021 when it became the client's responsibility to determine the contractor's IR35 status.
Since these changes were rolled out, thousands of contractors have had their IR35 status wrongly classified, leading to many paying more tax and National Insurance than necessary.
Then, in October 2022, the former Chancellor Kwarteng announced that contractors would once again gain control over determining their own IR35 status, a move that was widely welcomed by contractors. But where do contractors stand now?
Current Chancellor Jeremy Hunt soon reversed announced plans, declaring that these changes would not proceed. This means it remains the client's responsibility, not the contractor, to determine IR35 status. As expected, many contractors were left disappointed by this announcement.
This means that contractors need to be careful to ensure they don't get caught out by IR35. After all, this can lead to lengthy, costly, and stressful investigations.
For this reason, many contractors opt to use an umbrella company, which automatically exempts the contractor from IR35.
Expand your skillset
Whatever stage in your contracting career you're up to, it's always a good idea to upskill.
After all, gaining new skills can give you a competitive advantage when bidding for contract work and a more in-demand skill set in a competitive market.
The great news is that there are tons of platforms out there to help contractors upskill from the comfort of their homes.
Some of our favourite resources include:
The Open University: the Open University has a wide range of courses and offers contractors the opportunity to acquire an accredited degree in their chosen subject matter. This is great for contractors that want to learn a new subject area or gain expertise in their current field by doing a post-graduate course.
Udemy: Whatever sector you're in, Udemy offers a wide range of courses in everything from business, marketing, and software to finance.
Futurelearn: with over 1000 online short courses, Futurelearn is perfect for contractors to expand their knowledge.
LinkedIn Learning: offering a range of expert-led courses taught by industry experts, LinkedIn learning is perfect for contractors in all fields, from business and creative to tech.
EdX: offering courses and programs and accredited degrees, EdX spans several fields and subjects to help contractors boost their career opportunities.
Consider an umbrella company
One of many decisions that contractors must make is how they will contract, whether through their own limited company or an umbrella company.
For several reasons, contractors are worth considering the umbrella company routes this new year.
Firstly, using an umbrella company is a hassle-free option. An umbrella company takes care of the admin, paperwork, invoicing, and timesheets, so you don't have to worry about taking time out of your busy schedule.
The umbrella company will also become the contractor's employer. This means that they will pay the contractor a salary, sort out the contractor's tax and National Insurance, so you're always up to date and even provide the contractor with statutory benefits, including sick pay, holiday leave, and maternity/paternity leave.
An umbrella company will also provide you with the necessary insurance required for your contracting role and advise if you need any specialist cover.
On the other hand, contractors that choose to work through their own limited company will have to juggle running a business, invoicing the client, chasing any late payments, and filing their own tax returns, ensuring they have reserved enough to pay their tax bill.
Limited company contractors will also miss out on the benefit of receiving statutory benefits, meaning they'll have to pay out of their own pockets if they're ill or want to take a well-earned break.
Work with Search Umbrella
Now you know the many benefits of working with an umbrella company, the next step is to find an umbrella company that works for you.
After all, plenty of umbrella companies are out there, meaning contractors need to research to find a company that fits their needs and requirements. Thankfully, Umbrella Search is here to help.
At Umbrella Search, we take the pressure away from the busy contractor. After all, we know it takes time and energy to find the right umbrella company, so our team of friendly professionals takes on the task for you.
We work closely with every contractor to find out what they're looking for from an umbrella company, carry out all the due diligence and present you with a list of the best umbrella companies for you. Get in touch today to see how we can help you.
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