Issues to consider when working as an IT consultant

IT consultants often have a mandate to manage and oversee a vast range of important projects with a general goal of maximizing the value of tech for a business. Core responsibilities include training employees to use existing and new IT systems, designing the systems and networks to ensure they dovetail with an enterprise’s architecture, providing strategic advice across the tech spectrum and repairing and optimizing systems. IT and tech now underpins almost every aspect of modern business so consultants are usually in high demand and can expect to see a plethora of engaging and fulfilling roles, but what are some of the common issues associated with a career in consulting?

Consultant or employee?

You will need to determine your legal relationship with a client. If you provide a service to them you are generally defined as an independent contractor but if they exercise greater control over what is done and how it will be achieved then you are more likely to be an employee. This distinction is important, as mandatory legislation and rules apply to work relationships, and both the Annual Holidays Act and Employment Protection Act both do not cover consultants. It also plays a role in how you complete your tax affairs and other financial obligations, including how you get paid.


There are three guidelines for accessing your relationship within an enterprise – behavioral, financial and type of relationship. As stated before, if the company has control over what and how a job is completed and oversees business aspects such as providing tools and equipment then you are generally defined as an employee. The IRS also takes the relationship into account. It states that if an employer hires a worker “with the expectation that the relationship will continue indefinitely, rather than for a specific project or period, this is generally considered evidence that the intent was to create an employer­/employee relationship.”

Financial advice

Determining whether you are legally an independent contractor or employee is vital so it is recommended to clarify the status when you begin work as an IT consultant. It is possible to file a Determination of Work Status for Purposes of Federal Employment Taxes and Income Withholding document, which is the IRS Form SS-8, in order to get a definitive answer to the question from the government agency, but it can take up to six months. Financial issues in the world of freelance and contract work are often complex and overwhelming so it may be best to seek out a professional advisor about contractor pay.


Many independent IT consultants overlook the need for insurance when starting out due to a focus on other financial requirements such as paying bills and purchasing equipment. You should consider taking out insurance policies to act as a safety net when unforeseen events happen at work. An errors and omission or professional liability policy, for example will protect you from damages if you make a mistake as a consultant. IT is a technical career so things are likely to go wrong at some point and a good policy will cover your liability and the cost of your defense. Meanwhile general liability covers indirect damages such as negligence, libel and advertising injury. Other policies to consider include health insurance, disability insurance, life insurance and property insurance.

Work onsite or remotely?

Not all common IT consultant problems are financial. You will also have a say on whether you want to work from home or onsite. The client usually influences this decision with what works the best for them and the nature of the job role. While the lure of completing tasks remotely in a convenient manner is often the dream scenario for new contractors, onsite may be a better fit for your job overall. You will be able to access maximum internet bandwidth at all times, which can be an issue at home, collaborate with other employees in person and have a greater impact on work culture and generally be more productive during a working day.

Securing regular work

Sourcing regular work roles is obviously important for your career and long-term financial prosperity. The modern business landscape is increasingly competitive and you will have to show prospective clients you have an adaptable skill set suitable for a wide range of IT consultant roles. You can find work directly or through an agency and you should attempt to build a network of contacts. It’s not what you know, it’s who you know is a well-worn phrase but making yourself visible on job sites and social media can vastly improve your prospects.

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