Ireland's Contractor Market is Surging: Icon Accounting Explains Why

Ireland’s Contracting sector has exploded into life over the last decade: As many as 60,000 contractors now ply their trade in Ireland, working in a variety of professional industries – from medical and pharmaceutical to IT and engineering.

Ireland’s professional industries are buzzing with activity, and an abundance of new projects are yielding fresh opportunities for Contractors eager to capitalise on the country’s renewed economic vitality.

As the country nears full employment for the first time since the recession, the number of professional vacancies continues to climb – there were 9.4% more professional posts created in the first quarter of 2019 than in the final three months of last year. When compared to the first quarter of 2018, this figure surges to 14.4%. Science, technology and engineering are cited as being among the most in-demand disciplines.

In late 2016, the PCSO (Professional Contractors Services Organisation) estimated that the composition of Ireland’s workforce would shift substantially in the coming years, with the growing number of contracting opportunities leading to Contractors making up a greater percentage of the professional workforce. It’s no surprise that contracting is growing in popularity, given its advantages:

• Contracting provides professionals with a greater degree of independence and flexibility. Contractors are free to take extended breaks and plan holidays between contracts, enabling them to maintain a favourable work-life balance.
• Contractors can command greater remuneration. Contractors are generally paid more than their permanent colleagues
• Tax breaks are among the most enticing perks to those making the switch to contracting. Contractors can claim tax relief on business expenses – from mobile and transport charges to subsistence and accounting costs.
• Contractors can access greater amounts of equity. Because Contractors can command higher pay which is often looked upon more favourably by mortgage lenders.
• Contractors tend to have the opportunity to develop technical skills more quickly which in turn can help them to fast-track their careers and ensure that should another economic downturn develop they still possess a mitigating set of recession-proof skills.
• Contracting provides unique networking opportunities. Working from project-to-project enables Contractors to develop valuable professional relationships that will benefit them through their careers.

Another driver behind the rapid uptake in contracting is the evolvement of Contractor-friendly tax incentives:

An Earned Income Tax Credit was introduced in 2016 to incentivise workers considering self-employment; at present, the self-employed can claim €1,350 or 20% of their qualified earned income, whichever is reached first. This is expected to rise in the next budget. There have been significant advancements in welfare entitlements for Contractors too – in December 2017 the invalidity pension was made available to the self-employed, and from the last quarter of 2019 Contractors will be entitled to access Jobseekers’ Benefit for the first time in the history of the State.

In an earlier post we discussed the reasons why UK-based Contractors are making the short hop across the Irish sea. While Brexit uncertainties, similar working environments and a booming tech sector are piquing British interests, Contractors are also arriving in Ireland from further afield.

In March, we learned that working restrictions on spouses of professionals contracted in Ireland under the Stamp 1 ‘Critical Skill Employment Permit’ visa will be relaxed. Under current rules the visa on which spouses of these workers from outside the EEA travel to Ireland – the Stamp 3 visa – does not allow them to work independently. This is due to change soon, further bolstering the argument for contracting in Ireland.

The benefits of contracting aren’t exclusively felt on the part of the Contractor, companies feel benefits too with the importance of Contractors as a vital conduit of enterprise and innovation for corporations and SMEs, facilitating efficient and highly skilled project work.

Taking your first steps into self-employment is a liberating and empowering experience. If you’re interested in joining a growing movement of contracting professionals, speak with Icon Accounting today to learn how to set up quickly and efficiently.