It was quite a relief to me when the Chancellor saw sense (or whatever actually happened…) and decided not to implement the National Insurance increase for the self employed. There are many wonderful benefits to being your own boss, but for me at least, an excess of cash is not one of them! Overall, I earn significantly less than I did as a full-time employee, and of course have no paid sick leave or holiday, pension contribution, subsidised private medical insurance or paid time off for bereavement etc. etc. If I don’t work for any reason, my income goes down, plus I have to sort out all my own IT, training and so on.
Call me cynical, but it seemed an especially egregious move when so many people have joined the ‘gig economy’ because the number of 9–5 jobs has fallen. We take a brave leap into the unknown deciding to go out on our own – and keep unemployment figures down in the process.
Within this environment of uncertain income levels and increasing overheads, there has been an insidious rise in the demands some clients are now placing on freelancers, namely that they operate as a limited company and/or are registered for VAT.
I am neither. I operate as a sole trader, and that works perfectly adequately for me. I already pay an accountant several hundred pounds each year to do my tax returns, and their fees would increase substantially should I decide to become a limited company – which would have no perceivable advantage to me. Likewise, should my annual income reach anywhere near the VAT threshold (£83,000) I’d be sipping daquiris in the Bahamas and not be worrying too much about the extra administration time and fees it would cost me.
I’m aware of the IR35 issues, and so am careful to try and keep a variety of clients and never devote 100% of my time to any one for a prolonged period of time. I have professional indemnity insurance. I’m happy to sign any reasonable contract.
Operating as a freelancer I release my clients from a lot of expense and paperwork. I’ll work unsociable hours, at short notice, and have no expectation of a guaranteed flow of future work – usually not even a warning that they don’t need my services any more. If I do a good job, at a reasonable price, and deliver the required work by the required date, isn’t that the main thing…?