Category Archives: freelancing

IR35 Precipice approaches #IR35, #contractors, #tax

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Recent Government legislation means that from April 2021 Medium to Large private sector companies will assume responsibility for determining how the contractors they engage with will be taxed.

The definition of a ‘Medium to Large company’ is one which meets 2 or more of the following criteria:-

  • Annual Turnover > £ 10.5 Million
  • Balance Sheet >  £ 5.1 Million
  • More than 50 employees

So lets’ take a step back – what is IR35 ?

HMRC applies certain criteria to determine whether a contractor is within or without IR35

Within IR35 means the contractor pays tax & National Insurance contributions as if they are directly employed by the client – This is deemed to be the case if the client decides working hours, start & finish times, promises work in return for payment, depends on that individual doing the work etc etc

Outside IR35 means the contractor pays their own tax & National Insurance normally by the use of a Limited Company & is deemed to be outside IR35 because payment is on a project basis, no work is guaranteed by the client, work can be done by a ‘substitute’, hours & start & finish times are not fixed etc etc

The main change is this:-

Currently IR35 status is determined by the Contractors Limited Company – from April 2021 this will be the legal responsibility of the client.

The full consequences are yet to become apparent but some organizations have already decided to apply a sweeping classification of all contractors as being within IR35.

Following on from Covid-19 &  Brexix we have to challenge if this is the best approach to meet the needs of a dynamic & flexible economy.

chris@amberhill.biz

www.amberhillassociates.com

 

 

 

Start your own #consultancy #business from scratch..

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So you really want to start your own Consultancy business from scratch !?

ppt1Here are some tips I hope will help:-

  • Identify your key skills – if you want to sell yourself as a Consultant the first thing you need to identify is the skills you possess which people will be willing to pay for. If you can’t do this don’t give up your day job.
  • Develop a Business Plan – don’t put it off because you can’t be bothered or don’t think it’s necessary. If you want people to take you seriously as a Business you need to start thinking like a Business.
  • Identify your target market – who are you going to sell your skills to ? – your current or former employer perhaps ? Former customers or suppliers, ex colleagues, business partners etc etc
  • Network – Develop your contacts, LinkedIn is great for this but don’t forget about your address book & business card collection.
  • Have a look at the Professional Contractors Group website www.pcg.org.uk – it has a fantastic free downloadable guide for freelancers/consultants.
  • If you still want to take the plunge this is perhaps the hardest step of all – You will need a MINIMUM of 6 months income in the bank before you start. Do not plan to earn anything from your Consultancy business for the first six months. If you really want to succeed with your own Consultancy business you will find this money. If you see this as too big a hurdle then sorry but Consultancy is not for you.

Look out for my new book “Start your own Consultancy – Now!”

chris@amberhill-associates.com

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Happy National Freelancer Day #NFD2014

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Today is National Freelancer Day in the U.K (apparently) So what’s it like to be a ‘Freelancer’ in 2014 ?                                                                                                                          FreelancerSpeaking purely from personal experience I have been freelancing for over 5 years so here are my findings:-

Employment – Since leaving ‘permanent’ employment I have never been out of work & have moved fairly seamlessly from one contract to another. I am in Engineering so this may not be so easy in other professions. It also requires a degree of forward planning, I generally start ‘sniffing around’ 2 months from the end of my current contract. You also need to develop an extensive network of contacts & I have found ‘Linked In’ invaluable for this.

Earnings – This is what interests people the most about Contract work. In Engineering earnings are typically 20-30% higher than prermie’ earnings BUT it has to be remembered this doesn’t include holiday or sick pay, pension contributions, bonus etc etc. So if you are regularly sick & enjoy extensive holidays your probably better off as a ‘permie’

Tax – As a contractor you pay less tax. This is because you can set yourself up as a Limited Company & pay yourself minimum wage & the rest in Dividends which are taxable at the Corporation Tax rate which is lower that what you would pay as an individual. You can also deduct legitimate expenses from your taxable income. You can also take advantage of the Flat rate VAT scheme where you collect 20% & pay HMRC 13% of total earnings, keeping the difference. All of this is perfectly Legal & proper but do seek the advice of a qualified Accountant.

Be your own Boss – Sounds great but you always have to remember you also have a Client who is effectively paying your salary & you will have to report to someone.

All in all I have never looked back & intend remaining as a Contractor for the rest of my career. If you are considering this career option I wish you a Happy Freelancer Day & good luck.

chris@amberhill.biz

www.amberhill.biz



Start your own Consultancy from scratch – practical tips

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So you really want to start your own Consultancy business from scratch !?

ppt1Here are some tips I hope will help:-

  • Identify your key skills – if you want to sell yourself as a Consultant the first thing you need to identify is the skills you possess which people will be willing to pay for. If you can’t do this don’t give up your day job.
  • Develop a Business Plan – don’t put it off because you can’t be bothered or don’t think it’s necessary. If you want people to take you seriously as a Business you need to start thinking like a Business.
  • Identify your target market – who are you going to sell your skills to ? – your current or former employer perhaps ? Former customers or suppliers, ex colleagues, business partners etc etc
  • Network – Develop your contacts, LinkedIn is great for this but don’t forget about your address book & business card collection.
  • Have a look at the Professional Contractors Group website www.pcg.org.uk – it has a fantastic free downloadable guide for freelancers/consultants.
  • If you still want to take the plunge this is perhaps the hardest step of all – You will need a MINIMUM of 6 months income in the bank before you start. Do not plan to earn anything from your Consultancy business for the first six months. If you really want to succeed with your own Consultancy business you will find this money. If you see this as too big a hurdle then sorry but Consultancy is not for you.

Look out for my new book “Start your own Consultancy – Now!”

chris@projectsguru.co.uk

www.projectsguru.co.uk

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Why not start your own consultancy ?

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As Chairman Mao famously said “we live in interesting times”.

Office6Millions of people live in daily dread of redundancy, working longer & longer hours to appease the boss in an effort to avoid the dreaded 90 days notice interview and ultimate dismissal. I know, I’ve been there once or twice myself and it sucks!

However, there is an alternative, and that redundancy payment can provide a great springboard to a new successful and rewarding career.

Any professional person with a skill to sell can start their own consultancy business but it does need a set of personal attributes which not everyone has:-

  • Persistence – you will need this in abundance to generate leads and pursue opportunities.
  • Flexibility – are you willing to travel or work away from home.
  • Pick up things quickly – can you hit the ground running & “add value” from the start of any assignment.
  • Positive Outlook – do you let things grind you down or do you react by seeking solutions to problems.
  • Uncertainty – can you live with not knowing what you will be doing in 3 months ?
  • Outgoing personality – if you can get on with people from different backgrounds & talk to the cleaner as well as the CEO you will do well, if you are a shrinking violet who prefers staring at a computer screen all day you will fail.
  • Embrace Change – if you love ding different things in different places you will thrive. If you prefer the routine then consultancy is not for you.

For more practical advice on starting your own consultancy look out for my next post.

Extracts from my future book ” Start your own Consultancy….now!”

chris@projectsguru.co.uk

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10 great reasons for #freelancing & #contracting

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Following on from our last post about Freelancing here are some great reasons
you might want to go down this career route:-

 

  • Have you got a low boredom threshold ? – Freelancing allows you to choose
    the length of your contracts based upon your own preferences. 3 months, 6 months, 12 months – whatever suits you so your never anywhere long enough to get bored.
  • Do you thrive on a challenge ? – instead of sitting around doing the same old thing, getting stuck in a rut every contract opportunity presents a fresh challenge, new people to meet, new things to do.
  • Do you like traveling ? – open up your horizons by working in different
    parts of the country……. or even other parts of the world.
  • Fed up of Office politics ? – Freelancing allows you to ignore petty
    politics & get on with your job. You’re there to complete a task to the best of your abilities not to impress the boss into giving you promotion.
  • Would you rather have the cash than holidays or other perks ? – contracting offers higher rates of pay without the frills associated with “permanent” employment.
  • Do you enjoy looking for work ? – a serious question, if you love interviews you will love freelancing !
  • Are you available at the drop of a hat ? – if you are you may be offered a contract on the basis of a telephone interview as long as you are prepared to start immediately.
  • Can you handle uncertainty  ? – some people love not knowing what they will be doing in 6 months time – if you can embrace this you will get a buzz out of freelancing.
  • Are you sociable & outgoing ?  if you don’t enjoy meeting people &
    integrating you had better stick to that day job.
  • Are you flexible & adaptable ? – If you can join a new organization & hit the ground running, adding real value & making a big difference – contracting might just be the career for you.

chris@projectsguru.co.uk

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#Freelancers earn loads of wonga………..#HFD2012

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It’s Freelancer day today so lets debunk some of our favorite myths about freelancing:-

Freelancers earn loads of wonga –  Freelancer pay is very much dependent upon industry, location, length of contract etc. In Engineering a typical freelancer may earn 25% more than a “permie” but that’s like comparing apples & pears as the freelancer gets no paid holiday’s, sick pay, pension, bonus etc etc so a direct comparison needs to take into account the monetary value of these “permie” benefits.

Freelancers pay less tax – There is some truth in this. By owning a Limited Company a Freelancer may structure his pay to take home more income (perfectly legal) but the biggest benefit is being able to deduct legitimate business expenses like car mileage from taxable income. It should be stressed that legitimate Freelancers pay their full contribution according to UK tax law.
Freelancing is insecure – This is largely down to career management. In a lot of respects it can be more secure because the contractor has more active control. Rather than being at the whim of an employer the Contractor tends to be secure for the length of his contract & needs to be active in seeking another towards the end. If her Network is  well developed this is perfectly manageable.
Freelancers can’t get a proper job – some people move easily between Contracting & “Permanent” roles. The majority, however, prefer freelancing. Most Freelancer’s wouldn’t take a permie job given the choice.
Freelancers are ruthless opportunists – no more so than the companies who employ them on short notice contracts. Freelancers are certainly not naive & are perfectly capable of exploiting an opportunity should it arise.
 Freelancers are essential – Of course I would argue this but who else is going to step in & cover for 12 months maternity leave or provide invaluable support through a period of rapid growth. If it wasn’t for Freelancers the corporate world would be like a Swiss cheese.
Freelancers are competent Professionals – undoubtedly true. To survive without the fluffy blanket of corporate support, to learn on the job, hit the ground running, contribute immediately & be effective are all signs of competent professionalism. If you want an easy life don’t go into freelancing.
So why would anyone want to go into Freelancing ———that’s for the next post.
Happy Freelance Day!

chris@projectsguru.co.uk

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