Tuesday 27 October 2009

Am I Freelance or full time?


I 'm often contacted by other shoe designers who either want to go freelance or already are.

Because of the recession, I'd say there are probably more of us than there used to be as companies close and there aren't so many full time roles out there. Or are there?

I want to warn my fellow UK shoe designers to exercise caution when you are approached for freelance roles. Especially if the client wants you to work with them, full time, meaning you cannot take on any other work. If they want you to work in their office, using their equipment and they dictate your holidays and they won't let you subcontract, then, for me, alarm bells would start to ring.

Why?

Well, full time freelance is a bit of an oxymoron. In the eyes of the Inland Revenue you can either be a full time employee or freelance, but not both. In a time when companies may be looking to cut costs, I am seeing more and more evidence of what is essentially a ''tax dodge'' by companies. Should you be full time freelance, the initial benefits may be great (freelance rates with full time hours), but lots of risk to you. If the company changes it's strategy, you could be out of work instantly, no pay off, no notice and because you never had time for any other clients, no work. Not good. If the HMRC gets wind of the situation, you and your 'client' could be in trouble.
So, if you are approached about a freelance role or if you are freelance and working solely for one client, you should be aware of this. The onus is on you to protect yourself. Make sure you make it clear to the client that you will work for other clients and ensure that you have time to do this. If they insist you have to book time off (which will be unpaid because you are freelance, can you see how unfair this is?), you should refuse. There are plenty of freelance websites out there where you can ask questions about a specific role and needless to say the one of freelancer or employee is a very hot topic indeed.


''Because of the potential tax benefits enjoyed by freelancers, and the reduced liability for companies who use their services (instead of hiring employees), sometimes a firm might hire a freelancer to do what is basically a full time job – the would-be employee agrees to forego some of the security that comes with employment because of the tax breaks. Be warned though, the Inland Revenue doesn’t like this, and can force companies to convert full time freelancers into employees. As a general rule freelancers should only be hired because a certain skill or general manpower is needed for a short-term project, not as an alternative to properly employing a workforce. Should a freelance contract you’re being offered sound like a quasi-full time job, then it might be worth getting advice from a lawyer or accountant as to what the tax man might say. ''

From this link: http://www.unicornjobs.com/articles/2009/apr/10/all-about-being-freelance/

More here on our goverments website:
http://www.hmrc.gov.uk/paye/employees/start-leave/special/freelance.htm

and here
http://www.freelanceadvisor.co.uk/employment-advice/am-i-an-employee-self-employed-freelance-or-a-worker/

No comments: