Freelance projects can be an excellent way to work. In todays working culture remote working is widely accepted and celebrated and more and more projects requite the expertise of a contractor. Cogs have an excellent freelance finance team who can support you every step of the way.
Here is all you need to know about freelance payments
Day Rates:
There really are only a set of rough rules with working out a Day Rate; the more experienced you are, the more you should charge & the more talented you are, the more you can charge. Be prepared to flex on a job by job basis, there are a lot of variables to consider for each business you may want to work with.
People on slightly lower day rates who impress are always the ones who get invited back in. If you do a great job then you CAN get more in a few months. Patience is a virtue here especially when starting out in the freelance world.
Umbrella / Ltd?
With most recruitment agencies and employers you will need to be set up as what’s called an Umbrella Company or have your own Limited Company to get paid for your work; a British bank account is required. Cogs only work with Umbrella or Ltd, we can’t accept an invoice from sole traders, VAT registered or not. Umbrella companies are a good place to start, if you are unsure of how long you are going to be freelancing and want to test the water before setting up limited then it’s the way to go. If you get a good one, it’s easy to manage, safe and cost effective way to get paid. An umbrella company are basically a payroll company, they work out your earnings and deduct tax, NI and also, this is a bit of a shock for First Time Freelancers, Employers National Insurance Contributions (12.5%).
One of the under rated advantages of an umbrella company is that it provides a safe, simple and compliant method of employment for those freelance contractors who don’t want the considerable responsibilities, administration and hassle of running their own company. As well as this you can claim back tax on expenses. You will need to contact the companies directly for more info on this and look at PCG for more info provide link or ask friends who are freelancing for recommendations. There are a few companies out there that try to dodge tax laws and pay you a higher net pay, avoid this companies even if you think you could be 10% better off we would suggest you stay on the right side of the tax man.
Setting up a full limited company is a great idea if you are planning on maximising your freelance earnings and have planned to be a freelancer for a number of years. It’s very professional to invoice private clients with you own personal company and you get more control in creating invoices and looking after payments. But with this you need to be much more organised. Unless you have a keen interest or a degree in Accounting you will need to pay an accountant or accounting company to look after your business accounts each year and submit them to Companies House. http://www.companieshouse.gov.uk/ . There are accountants that specialise in working with one person LTD companies again PCG is a good place to find these suppliers.
The main thing with freelancing is it’s subject to change at any time and that as soon as you accept a contract; it’s your choice to be bound by the freelance terms, written or not. However frustrating it is when a job cancels or gets cut short you have to bear in mind that’s the risk you take when you choose to take on a freelance assignment. You can charge notice period but I only recommend this in extreme circumstances and if it is fair. If you over use notice period that employer will look less favourably on getting you in next time I’m afraid – remove.
Payments:
One thing to consider when working your rate out is how quickly you will get paid. Some companies may have some rather stressful, time absorbing payment terms. Anything from 60 – 90 working days is not unusual and a cheque that gets lost in the post after that is also something you may hear more than you would like. You can check out a company if you are freelancing directly for them here: https://www.creditfocus.co.uk/ it’s approximately £15 a month + VAT to see if they are credit worth, though this is no guarantee.
Cogs have payment terms that are very competitive, you can invoice every Tuesday and we pay working 9 days later. Most other recruitment agencies will have a variance of terms and are timesheet based so do get them in on time and read the Payment terms you are sent to avoid surprises.
Freelance jobs have a quick turnaround so we don’t list all our freelance opportunities in our website, so contact us today to discuss your next step!
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