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A 12 Month Contract - The Holy Grail?

After you've become established in your freelancing career, you'll probably run into a company or two that wants to book you for a longer term contract.

While you may enjoy short term assignments, it's tempting to consider the security of such a position - it appears, at first glance, to offer the best of both worlds.

One of your first considerations, however, is how this impacts your IR35 status. When contracting long term, you could find yourself becoming integral part of the team and as such, being treated exactly the same as a normal employee. This could dramatically impact your tax position as you would need to apply the deemed employment payment calculation to your salary. To put that another way, you would be working 'Inside IR35'.

For short term projects, it is often easier to prove your self employment status, provided by course you follow the IR35 rules to the letter.

Another thing you may find, as many contractors do, is that you simply are not meant for the long term contract game. The security may be nice, but a great many contractors actually prefer moving from one client to another, contracting on a different project or even in a different industry every few months. The security of the long-term contract may, indeed, turn out to be quite dull.

There is, of course, something to be said for long term, regular work. While contracting may offer the freedom of moving to new and exciting projects frequently, it's not common to find a large and enduring project - something that truly makes an impact - which cannot be implemented in just a few months. Regardless of the security involved, what may appeal to you is the size and scale of the project.

In the end, whether you opt for the freedom of short term contracting or the security of a long term assignment, the decision rests largely on what you want out of your career. If you prefer the excitement of a fresh task every few months, you will probably want to stick with short term work... but if you're keen on the prospect of working on something larger that you can really get your teeth into, it may turn out that the 12 month contract really is the Holy Grail....

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