to not want to become a freelancer?

[AnneWentworth]

I am a contracter at present, the job is a temp/perm position.

The company is established in the US and don't as yet have everything set up here. I have been working here for about 5 months and am very happy and they want me to become permanent (I work directly for the Chairman).

I have a call to discuss arrangements later today but the FD has asked if I would be adverse to setting up as a freelancer. I have some reservations:

• I will have to do my own taxes and NI which will take up my time (I have a lot of outside work commitments).

• I presumably won't get all the benefits that being permanent brings like sick pay, holiday pay etc (before things like bonus etc).

• Lack of job security?!

The only plus I can see is that I could at a later date chose to be more flexible in my working practice and could use my freelance business to my advantage - but I have no immediate plans for this.

If I have to do my own tax etc then is it unreasonable to ask for more money? I am not even sure if the two are connected but if I am employed I won't have to incur this admin issue.

Are you sure they aren't getting contractor and freelancer mixed up?

It is illegal for them to employ you as a freelance if you're not - and is often a scam to get out of paying employers' NI etc.

have a look at this

You can of course expect/demand more money as a freelancer, because you have to cover yourself for periods out of work/on holiday etc. But there's no such thing as a permanent freelancer...

That's interesting and helpful. I will just tell them this. He was suggesting that I set up with a company name etc. I imagine that as a US company perhaps the NI situation and just employment issues are new to them so they are bouncing ideas about.

Yes Wilson so I basically will still be a temp but with the headache of tax returns.

I thought a contractor and freelancer were the same thing (confused ??)

The main advantage of not being permanent staff is getting paid lots more (typcially 3 or 4 times permanent salary in my industry). You can potentially also claim things like travel expenses.

The disadvantages are all the things you list.

Personally (depending on the industry you work in) I don't think that any job is that permanent these days and would be inclined to take the more money short term. (with potential to switch to permanent later?) But obviously up to you.

Scroll down for the definitions, this is useful:
www.freelanceadvisor.co.uk/resources/am-i-an-employee-self-employed-freelance-or-a-worker/

In the UK at least, US law may be different.

If you are responsible for your own tax and NI and your work is more irregular then of course its perfectly reasonable to expect to be paid more

Hmm, well he has just emailed me again and asked what I take home after the agency fee and what I feel would be suitable remuneration.

Ok, let me not drip feed.

I work as a PA at a high level (albeit my first position that has a swankier title).
I have fantastic flexibility with my other commitments in that my boss travels a lot and am able to work remotely for much of the time. This I cherish and cannot buy.
The position at the temp rate pays about £2k under the where I would expect the lowest salary to be. The highest would be up to 12k more.

It sounds to like they want to by pass the agency fee, this could be an issue if that is what they are doing. Agencies charge if any of their clients are moved from temporary work to a permenant contract. By asking you to set up a company, I think, the company you are working for is hoping that the agency will not find out about this little arrangement.

I have made it clear that it must go through the agency, so they will still have to pay a finders fee, plus the agent is actually a friend of mine so it would be difficult to cover it up and I wouldnt do it anyway.

Now I have to work out what to say about salary.

Calculate every expense you will incur going self employed and starting a company. You need to factor in also how to cover sick and holiday pay. Expenses also include anything that you use at home, electricity, phone etc.

As Binky said, they are either trying to avoid paying the agency or to avoid setting up payroll for an individual in another country.

If you are working exclusively, ft for one company then it's unlikely HMRC would accept you to be self-employed (ie a freelance). You may however be able to set up as a self-employed contractor, who has a ft contract for those services.

But this is pretty heavily regulated iirc - so as not to make it a tax dodge for the employing company. I think you should maybe post on the freelance/self employed board? Or hopefully an accountant will pick this up, there are a few on here.

The electircity etc is tricky because they don't so much ask me to work remotely rather it is a perk.

Pay attention to income tax levels. Self employed means you could end up at in the higher tax payer bracket. Owning a company can reduce your tax level by using dividend payments etc. I'm not too knowledgable on the subject but DH has waffled on about why he has a ltd company and is not SE.

Thanks. I have drafted an email with salary ranges and explained that as a freelnacer I would need the top end to counter the lack of security and as an employee would accept a different package. I think that is reasonable.

Do you have to travel anywhere outside of your home or place of work? If you do then ensure your offer to them deals with this. A lot of companys expect your rate to be inclusive of hotels, extra travel costs and food, it can add up to a lot of money that you have to cover if you don't get them to agree to paying.

No, I will have a trip to the US but the expenses will be picked up by them and I have a company card anyway to put things on.

This is a new contract so double check.

It has just been pointed out to me that this isnt a decision that I can make in the next hour.

Indeed. Hear what the FD has to say then take proper advice. There's no real 'best' way - every way has pros and cons.

Whoever pointed that out is a smart cookie - listen to them

if you are going to do this do it through an umbrella company. basically they employ you through it. the umbrella company sort out all your taxes etc and it'll cost you about £50 a month cheaper than your own company and no accountants to deal with. work out your hourly or day rate.

Scrummy - I have worked through an umbrella company before. That could work, although I am still going t be dealing with timesheets etc, but it could be a middle ground.

You need to see an accountant before doing anything.

You will be liable for Employers NIC as well as your own NIC. There are also the overheads of:- company accounts/PAYE/Corporation tax returns etc. These will cost you and must be considered.

You also need to ask the accountant about IR35 and its implications.

You can't be a full-time permanent freelancer for one company AFAIK.