Midyear Review: Is It Time to Make a Move in Your Contracting Career?

As we reach the midpoint of the year, it’s a natural time to reflect on your career and consider whether it might be time for a change. If you’ve been following our Iconic Insights podcast, you might recall our first contractor dilemma focused on determining the right time to consider a move in your contracting setup. While factors like contract timeframes, upcoming extensions, and compliance with your client are crucial, there are other significant considerations if you're questioning whether now is the time to make a change. Here, we recap the key factors to help you make an informed decision.

Will Your Client Company Accept a Change?

One of the primary considerations when contemplating a move is the acceptance of your client company. Here are some aspects to consider:

Current Contractual Obligations: Review your existing contract to understand your obligations and any potential complications from this perspective.

Compliance Requirements: Ensure that any changes you propose will remain compliant with the client’s policies and industry regulations.

Do You Have Reasons to Make a Switch?

Beyond client acceptance, there may be personal or professional reasons driving your desire for change. Here are a few scenarios to consider:

Multiple Clients: Are you looking to diversify your portfolio and work with multiple clients simultaneously? This can provide more stability and opportunities for growth.

Hiring Employees: Do you need to hire an employee to support your current projects? Expanding your team can help manage workload and increase productivity.

New Business Ventures: Are you considering developing a new business idea you’ve always wanted to explore? Now might be the perfect time to transition and invest in your passion project.

If any of these apply to you, it might be time to consider setting up a Personal Limited Company. This structure offers more flexibility and control over your contracting career.

Do You Consider Contracting a Career Choice?

Contracting can be a fulfilling career choice, offering autonomy and the potential for higher earnings. However, it's essential to consider whether contracting aligns with your long-term career goals.

Long-Term Vision: Do you see contracting as a long-term career path, or is it a temporary phase? Understanding your long-term vision will help you make decisions that align with your career goals.

Professional Development: Are you taking steps to continuously develop your skills and stay competitive in the contracting market? Investing in your professional growth is crucial for long-term success.

Do You Currently Require All Your Income to Be Paid Monthly?

Financial stability and requirements are a key factor in deciding whether to make a move. Consider the following:

Monthly Income Needs: Do you need all your income to be paid to you on a monthly basis to meet your financial obligations? If so, is there a requirement for you to change your company structure? Or perhaps if you are paying Class A PRSI under a PAYE Umbrella Company structure, you could explore switching to a Director Umbrella Company, pay Class S PRIS to be tax efficient, and still receive your full net salary from the company.

Building Company Reserves: Can you afford to build company reserves? If your monthly financial obligations are less than the income you receive, this is where you can look at the options of building funds in your company, and using these funds in the future in a tax efficient manner, or for future business growth in your contracting career.

Do You Have Business Expenses and Assets to Consider?

Another important factor to consider is your business expenses and assets.

Business Expenses: Do you currently have a high volume of business expenses you require to be processed for your contract opportunity? Managing expenses efficiently can impact your overall profitability and tax obligations.

Business Assets: Are you looking to purchase business assets in the future? Investing in business assets can be a strategic move for long-term growth and efficiency.

If this is the case, proceeding to explore setting up a Personal Limited Company would be worthwhile.

Conclusion

Conducting a midyear review is an excellent opportunity to evaluate your contracting career and decide if it's time for a change. Consider your client's acceptance of potential changes, your personal reasons for switching, whether contracting aligns with your career goals, and your financial stability. If after careful consideration you decide it's time to move, setting up a Personal Limited Company might offer the flexibility and control you need to take your contracting career to the next level.