Be more prepared. Is contracting the right choice for you?

Transcription

1 Be more prepared Is contracting the right choice for you?

2 Working as a contractor or freelancer what s it all about? Working as a contractor or freelancer is very different from standard employment. When you work for yourself, you don t have a boss and become completely responsible for your own successes and failures. Making the move into the independent professional workforce can be a step into the unknown. But there are so many fantastic upsides and opportunities that it s unsurprising that so many skilled professionals up and down the country are ditching the 9 to 5 and setting up for themselves! So what exactly makes the self-employed lifestyle so appealing? Well, as a contractor or freelancer, you re in control of your own time, you pick and choose the assignments you work on and can take more pay home at the end of the week. Independent professionals are the masters of their own destiny! Of course, there are a few more negative sides too; when you work for yourself, there s usually less security, more uncertainty, and increased hassle and paperwork. Fortunately, specialist contractor service providers like Outsauce are on hand to help you make the most of the positives and reduce the impact of the negatives. In this guide we: provide insights on important areas you ll need to consider when you set up for yourself answer some of the most common questions related to contractor freelancer working explain the key benefits of our employment models 2 Be more prepared. Everything you need to know about contractor working

3 Going it alone what do I need to think about? There isn t really one route to success as a contractor, but there are certainly some things you should focus on to ensure you hit the ground running and maximise your opportunities. Be more adaptable Can you adapt to different cultures, approaches and ways of working easily? If you really prefer the comfort and security of working in a highly familiar environment, contracting might not be for you. On the other hand, if you thrive on new opportunities and continuous development, it could be the best choice you ever make. Be more sociable As an independent professional, you ll be moving from assignment to assignment on a regular basis, working in lots of new workplaces and meeting new people every few weeks. So the ability to quickly make new working relationships is a real bonus. Be more valuable Be more noticeable Get networking and always be on the hunt for leads. This doesn t always come naturally to people, but as a contractor you re essentially your own business development team! The more you can get your name out there, the easier it will become to find new leads and build a larger network. Be more organised Working for yourself invariably means dealing with some extra paperwork. Depending on the engagement model you use, this can range from just spending a little more time filling in expenses and timesheets than you used to, all the way up to managing the accounts and filing tax returns for a small business! In addition to organising your finances, you ll also need to be meticulous in how you maintain and update contacts if you want to make the most of any potential leads. Never underestimate your value and make sure to use your skills to help your end-clients as much as possible. Many businesses take on contractors to help them meet important skills shortages, meaning you can add real, lasting value to the business which goes over and beyond your assignment remit. And this, of course, will quickly build your reputation. Remember, your ultimate ambition as a contractor is to build such a fantastic reputation that you are the first person anyone thinks of when they have a relevant project. 3 Be more prepared. Everything you need to know about contractor working

4 Sounds like it is perfect for me what are my next steps? Okay, you ve thought about it and think the independent professional lifestyle seems perfect for you. What do you do next? Choose an appropriate engagement model For most people, the next step is deciding which engagement model they will work through. The best choice will depend on the type of work you ll be doing and the amount of responsibility you re willing to take on. The two main compliant models to choose from are: Contractor PAYE: With the Contractor PAYE model, you benefit from the freedoms of flexible working and the security of being an employee. Limited Company: Setting up as a limited company can deliver significant tax advantages and flexibilities but comes with added requirements and responsibilities. In the next section we provide more details on the specific benefits of each of our employment services. Think about your fees and rates Setting your rates and fees appropriately is an important step in making sure you are attractive to potential clients and also make a fair income. You might be tempted to undercut your rivals to secure projects and win business and this tactic can work in the short term. However, in the long-term your rates represent the perceived quality of your work if you appear too cheap, businesses may question your capabilities. Get your name out there When you re starting out, getting your name out can take considerable effort. So make sure to leverage your existing network as much as you can to build new contacts and stay up-to-date with any potential opportunities. It s also a good idea to start building your online presence as early as possible. Creating a good quality website is much easier than it used to be and you can use blogs and social media to build your profile and engage with potential clients. LinkedIn and Twitter are ideal platforms to start sharing expertise and building a valuable online community. And your website and social profiles aren t just a way to showcase your expertise and professionalism, they also make it a lot easier for potential clients to find and contact you when they are looking for someone to carry out a project for them. Be prepared for the added admin From the very first assignment you carry out, you ll need to ensure you are collecting all the relevant records and information that HMRC and agencies like Companies House might need. Make sure you retain all your receipts and adhere to both corporate and personal tax obligations, such as VAT, PAYE and Corporation Tax, as well as filing statutory accounts on time. Outsourcing and accountancy firms like Outsauce can support you with a lot of this work, but ultimately it will be your responsibility to always keep on track with any legal obligations. 4 Be more prepared. Everything you need to know about contractor working

5 What makes Outsauce stand out? There s no doubt that there are many operators out there offering engagement solutions for contractors and freelancers. So what makes us stand out from the crowd? A complete service We have over 15 years experience providing a complete range of compliant engagement support solutions to independent professionals. We also work with a range of leading service providers to ensure we can help you with every aspect of contractor working, from support with mortgage applications to sorting out any specialist insurance requirements. 100% compliancefocused With vast industry expertise and a team of dedicated accountants, you re in safe hands when you team up with us! We re so confident that you ll be operating within the correct solution for your engagement when you join Outsauce, that we guarantee to support you all the way in the unlikely event HMRC challenges your employment status. Best advice consultation A warm and lasting welcome When you choose to work with us, you become part of a supportive team. On joining, we provide a comprehensive Welcome Pack and in-depth handbook with full H&S advice. We ll also get you set up with a personal online portal and assign a dedicated service contact to you. Our aim is to make sure you have all the information and support you ll need right at your fingertips. We re also always on hand to help you with any issues you might have either through our telephone helpline, or via your own personal online portal. Rewarding you We reward you for supporting and recommending us. When you refer a friend to Outsauce, we ll pay you 100 when they sign up. And that s not a one-off offer you ll get 100 for each friend that signs-up because of your referrals! All you need to do is fill out a simple form on our website and when they sign-up you ll earn 100. We are there from the very start to help you make the most informed choices. Our free, no obligation best advice consultation helps you make an informed decision on the most appropriate working arrangements for your unique circumstances. We work with you to consider all your options based on the type of services you provide and regularity of work you do, along with your typical earnings. The results will present you with the facts about the engagement options open to you, so you can pursue the most appropriate route. 5 Be more prepared. Everything you need to know about contractor working

6 FAQs If you have more specific questions regarding the complaint engagement models we offer, why not check out this list of commonly asked questions. Hopefully you ll find the information you re looking for, but if not just get in touch. Contractor PAYE FAQs Q: Who is my employer with Contractor PAYE? A: Working with our Contractor PAYE model means you are employed by Outsauce, rather than the particular organisation where you carry out your work. This means you receive your full statutory employment protection rights and benefits. Q: What paperwork do I have to manage under the Contractor PAYE model? A: Not much, really! It s simple, just submit your timesheets and expenses claims and we ll take care of the rest. We ll invoice the client/ agency, handle PAYE and all NI contributions and pay your salary. Q: Will I save money if I work through Outsauce? A: Usually, yes. You ll be able to reduce your tax and National Insurance payments through the offset of all wholly and exclusively incurred expenses that arise as a result of you completing your work. Q: What employment benefits do I receive with the Contractor PAYE model? A: Our Contractor PAYE solution provides you with all the freedom of temporary work, along with other significant employee benefits such as personal accident insurance. For example, in the case of any accidents, we ll cover you for 52 weeks of incapacity and, in the most extreme fatal circumstances, provide a compassionate service for your family. 6 Be more prepared. Everything you need to know about contractor working

7 Limited company FAQs Q: What liability do I have as a company director for a PSC? A: As a company director in a PSC, you have limited liability. This means your personal financial liability is limited to a fixed sum, most commonly the investment you have made in the company. If a company with limited liability is sued, then the plaintiffs are suing the company, not its owners or investors. Q: What is IR35 and will it impact the working options I am eligible to take? Q: What are dividends and how do I pay them? A: Dividends are profits paid out to shareholders and can be paid on a regular or irregular basis as long as there are profits available. It s always a good idea to inform your accountant of any dividends withdrawn so that they can monitor your business for any other tax related issues such as higher rate tax. Q: What can I claim as business expenses through a PSC? A: IR35 legislation is designed to ensure that an individual is genuinely self-employed and not deemed a disguised employee (a permanent employee posing as a temporary worker). It is treated as a case-by-case review on each assignment you work on. Outsauce is on hand to help you with any IR35 queries to ensure you stay on the right side of the legislation. Q: How will I know if I need to register for VAT? A: As a director of your own limited company there s a whole host of different expenses you can offset, such as general commuting to work, office stationery, computers and much more! The only thing to take in to account when claiming an allowable expense is that it should be wholly, exclusively and necessarily incurred in the performance of your day to day business. A: This all depends on your company turnover. If you are going to turnover more than 81,000 per annum then you must register your limited company for VAT. If your turnover is under 81,000 then you can still choose to register for VAT to receive other benefits such as Flat Rate VAT. 7 Be more prepared. Everything you need to know about contractor working

8 Be part of the Outsauce team Take you next steps into the exciting world of contracting today. Call us on: or t: e: Registered Office: Cheltenham House, Clarence Street, Cheltenham GL50 3JR. v1 10 December 2014