Permy, Contractor or Freelance? Alex Whittles

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[email protected]

PurpleFrogSystems.com

PurpleFrogSystems.com/blog

@PurpleFrogSys

Permy, Contractor or Freelance?

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Alex Whittles

Business Intelligence Consultancy

Data Modelling ETL Systems

Data Warehousing Reporting Systems OLAP Cubes Managed Service

• SQL Bits Committee SQLBits.com • SQL Relay Committee SQLRelay.co.uk • Birmingham SQL UG SQLMidlands.com • Birmingham Azure UG AzureBirmingham.uk • MSc in Business Intelligence, CEng, CITP, FBCS, FIOEE, MIET, MIOD

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What will we look at?

• My history

• Expectations

• Marketing

• Cash flow

• Accounting

• When

• How

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My Story So Far

• Application Developer

• Dev Team Lead

• Director of Software

• Contractor

• Contractor / Freelance

• Freelance

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Employers’ Expectations

Freelance

• Instant delivery • Technical expert

• Business knowledge and understanding

• Senior Management / CxO level conversation

Permy

• Personality, attitude, ability to learn, teamwork

• Long term bet, investing in you and your long term ability

Contractor

• Existing experience in the technology or industry • Ability to deliver - no training on the job.

• But… you get time to figure it out. • Tech level conversations.

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Marketing

Freelance

• Website

• Google Adwords

• Reputation / Word of Mouth • Branding

• Existing Clients • Blog

• Books

• Speaking

Permy

• Recruitment agencies • CV & Linked-In

• Stability, growth, reliability, personal & technical development

Contractor

• Recruitment agencies • CV & Linked-In

• Technical and industry experience, contract renewals • Different CV focus

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Cash Flow

Freelance

• Short Term - VERY spikey

• Essential to build a cash buffer >= 12 months income • Mitigate with part time contract(s) or regular customers • Recurring revenue

Permy

• Long Term Stability • Holiday & sickness pay • Pension

Contractor

• Medium Term Stability • No holiday or sickness pay • Pay your own pension

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Accounting

Permy

• n/a

Contractor

• One invoice at a time – can manage in Excel/Word • Self Assessments

• Ltd Company

• Real Time PAYE

• End of year accounts

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VAT

• Normal VAT Registration

–

Add 20% onto invoices

–

Deduct VAT on purchases

–

You pay the balance to HMRC

• Flat Rate Scheme

–

Simplified

–

Add 20% onto invoices

–

You pay 14.5% to HMRC

–

Winner!

Income Spend £100 £50 £ 20 VAT (20%) £10 £120 Total £60 £10 paid to HMRC £50 profit Income Spend £100 £50 £ 20 VAT (20%) £10 £120 Total £60 £17.40 paid to HMRC (14.5% of £120) £42.60 profit

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VAT

Income Spend £100 £50 £ 20 VAT (20%) £10 £120 Total £60 £17.40 paid to HMRC (14.5% of £120) £102.60 profit Income Spend £100 £0 £ 20 VAT (20%) £0 £120 Total £0 £20 paid to HMRC £100 profit

• Normal VAT Registration

–

Add 20% onto invoices

–

Deduct VAT on purchases

–

You pay the balance to HMRC

• Flat Rate Scheme

–

Simplified

–

Add 20% onto invoices

–

You pay 14.5% to HMRC

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Accounting

Freelance

• Multiple invoices, different payment terms – Get Software! • Xero / QuickBooks Online

• FSB – includes tax investigation insurance • Get a GOOD accountant

Permy

• n/a

Contractor

• One invoice at a time – can manage in Excel/Word • Self Assessments

• Ltd Company

• Real Time PAYE

• End of year accounts

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LTD Company?

• Tax efficiency of company dividends

–

Not any more…

• Personal financial protection

–

Not from malpractice

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Other options

• Sole trader

–

You are the company – single legal entity

–

Cannot be VAT registered

–

No liability protection

• Umbrella Company

–

You’re employed as permanent staff

–

They invoice on your behalf

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IR35?...

• Tax Legislation

–

Catching perm operating as contractors

–

Evolves – get current advice

• Public sector contracts

(from 2017)

–

Moves responsibility from contractor to ‘employer’

–

An end to public sector contracting as we know it?

• Mitigate:

–

Advertise

Risk

–

Substitution

Sub-contract

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When to change

• Are you happy?

• Income Vs Stress

• Work Life balance – define your goals

• Why do you want to change?

• Where do you live?

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Do you need to change?

• Discuss with current employer

• Negotiate (whether new or existing job)

• Don’t always take the first offer

–

Are you the best candidate/employee?

–

Define your ideal/minimum requirements

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So what next?

• Enjoy your job

• Figure out your goals

• Increase your profile

• Network

• Change can be good – for the right reasons

• Start now

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