Top 3 reasons to be a Freelance Contractor

Young woman with checklist over shoulder shot

PCG published this story on 3rd July 2013:

Demand from UK businesses for contract workers is continuing to rise in 2013, which could be good news for freelancers looking to get their foot in the door on a lucrative new project.

According to the latest Report on Jobs from KPMG and the Recruitment and Employment Confederation (REC), the appointment of temporary workers increased significantly during May and could be set for further increases in the future, while the overall jobs market continued to improve.

Despite the economic downturn, companies are still on the lookout for talented new employees, with demand surging after a slowdown in April. The findings pointed to more vacancies in the private sector than public sector roles.

So why would you want to be a Freelancer.

      1. Pay rates – generally contractors are paid considerably more than employees
      2. Flexibility – you are your won boss but the downside is that you have to find work
      3. Tax – the following is from Contractor Weekly and is a quote from Seb Maley (QDOS)

“Operating through a limited company as opposed to an employee brings significant financial benefits. By taking a small salary and high dividends you pay far less National Insurance, saving around 26%. There are obviously associated costs involved in running your own company, such as accountancy fees and insurance, but the overall ‘take home’ pay will still almost certainly exceed that of an employee.

But with the benefits there also comes risks. The IR35 legislation could affect any contractors working through limited companies and it’s vital that you take steps to ensure you are compliant. Contracting is also far less stable than permanent employment; you have been engaged as a temporary resource and your client can terminate the agreement at any stage. There is also the issue of illness; as a contractor you won’t receive any sick pay from your client, so any days not worked will hit your finances.”

But on a final note makesure you have the right equipment as explained in this sketch

HMRC IR35 Business Test expected to go live in April 2012

The Employment Status Test has been around for a few years now, see my recent Blog but now IR35 is going to get special attention from HMRC.

What is IR35?
The Term “IR35” became established following a Budget press release issued by the Inland Revenue on 23rd September 1999. That press release was called “IR35”. At its simplest, IR35 is the way in which the taxman closed a loophole that was allowing many contractors and freelance professionals to avoid paying large amounts of Tax and National Insurance.

IR35 Forum

The latest IR35 Forum minutes show that a new trial IR35 business test will be made live on the HMRC website in April, together with a set of typical scenarios to help establish how likely a business is to be caught by IR35.

The minutes for the last two IR35 Forum meetings (21st February and 8th March) have been published on the HMRC site.

Out of an initial set of 17 IR35 scenarios examined by the Forum, the external members and HMRC agreed on 14 of them.

It was agreed that in order to avoid confusion, just 6 scenarios would be published online. Of these, two were ‘IR35 caught’ contracts, two were outside of IR35, one is a ‘grey’ case, and the final case begins outside IR35, but moves within the scope of the rules due to changes in the company’s practices.

Clarity on tax rules is always a good thing, but it will be interesting to see where the lines have been drawn.

When you buy an ERP system, what happens post order?

Enterprise Resource Planning systems such as Microsoft Dynamics can be configured in many ways.

Prior to Order, you will probably have issued an RFP (Request for Proposal) and had a bid process. Typically a Dynamics system might start from £200k with probably half the cost or more being for consultancy.

Once you have selected your supplier, the first stage is Systems Design, I have worked on many of these, basically, you gather information on how the business works now, right down to fine detail such as how control accounts are used and what reports are currently used, then you consider what is possible with the new ERP system, what is the best way to perform tasks, how are results reported, some of the information will be flowcharted and a route map drawn up to get from where the business is now to the new ERP system. It is a highly detailed process, my reports were typically 200 pages long and the supplier and client sign off the report before configuration work starts.

Next the system experts get to work and make a mock up of the system and then workshops are done with senior management and directors to makesure the clients instructions have been correctly intrepreted, this process is then signed off.

The next stage is Training, normally immediately before the system goes live.

If you need any help let me know.