UK Economic Crisis… What Crisis?

Positive results show that despite the existence of a sometimes overwhelming economic crisis, contractors are far from taking a downturn, and from results revealed by accountants, the effect of the state of the economy is having no rough effect on contractors.

With unemployment climbing, and salaries wavering across the country, most employees are suffering the effects of the financial situation, but now it is seemingly clear that contractors needn’t worry… just yet. With contracts rife and quality of work sustained, positive results in the contracting world is a promising thing.

Being a contractor means that because of a far lower tax bracket than an average employee, the amount of money earned overall (the take home pay) is increased dramatically due to having to pay less tax. Contractors can be paid up to 25% more than employed professionals and because they work on a contract basis, are not fired, made redundant or laid off unless there is a breach of contract. Is contracting the profession to be in during the ‘recession’? Let’s take a look.

  • Contractors are commonly higher earners when it comes to hourly rate than employees due to having to pay less tax.
  • Contractors work on a contract basis and are therefore not tied down to additional services that are not specified in the contract.
  • Contractors are not covered by any protection given by an employer’s umbrella; therefore require a number of contractor insurance products.
  • Contractors lack benefits and stability that is again provided by a fixed employer.

From having a glance at the benefits and potential downsides to being a contractor, it is clear that where many professionals suffer, contractors thrive, and in an unstable financial climate, maybe the contractual, somewhat less limiting line of work of contracting prevails.

By:Steven Bailey

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