A freelancer might be one of the following:

– short term employee of a client or an agency
– employee of an ‘umbrella’ company
– self-employed individual
– director and shareholder of a limited company (also known as a personal service company or PSC

Advantage and disadvantages of each option

Agency PAYE
The basic option, agency PAYE, is straightforward and the least profitable because although you receive a salary, holiday pay and statutory protections there are either no expense allowances or these can be restricted.

Umbrella
An umbrella company, in addition to the agency PAYE legal provisions regarding salary etc, also allows you to claim bona fide expenses, which means more pay in your pocket. You have no admin, no commitment, no hassle and no limited company statutory or legislative worries and responsibilities.

Self-Employment
A self-employed individual is usually paid gross, unless working on a construction project, and simply needs to keep a record of their business related income and expenditure and submit accounts once a year to HM Inland Revenue with their self-assessment.

All agencies and some clients may not agree to contract on a self-employed basis.

Limited Company (PSC)
Setting up a limited company should not be a short-term proposition, as it requires genuine commitment. Managed properly, running your own company has a number of advantages: being in control of your own business, the freedom this brings and the ability to optimise your income.

As a company director, you will be responsible for bookkeeping, credit control, accountancy, insurance cover and administration of the company’s bank account, while also securing the necessary work to provide an income.

With all this in mind, you need to make sure your decision to freelance is primarily a lifestyle choice.

Don’t be influenced by employment and tax laws as they undoubtedly change.

We will guide you through the legislation and compliance procedures and any changes to them, and you can be confident that you are receiving the best accountancy support and working as safely as possible.

Our accountancy, tax advice and support services remove as much of the administrative burden as is appropriate and provide guidance, to ensure you meet your responsibilities.

As a business owner however, the ultimate responsibility does rest with you.

You can call us to discuss any questions you may have about our services, or if you need help in assessing other accountancy and support services you have come across.

Once you have made your mind up, getting started is extremely easy.

Call Justin now on 0845 054 55 60 to find out what solution is best for you.

Because our scheme uniquely enables you to avoid both employers and employees national insurance contributions, this is far more tax efficient than any existing arrangement you may have in place and makes even short term membership very lucrative indeed for you.

A scheme tailored to your needs

With the iBalance Group Personal Pension Scheme you benefit from:

– Up to 69% tax relief at source, even basic rate taxpayers save 39%
– No set-up fees whatsoever
– Flexible investment levels, you decide what goes into the scheme each month
– A fully portable pension (if you leave iBalance you are free to continue investing or can transfer without penalties)
– A wide fund choice so you can choose exactly how your money is invested (you have access to specialist independent advice too).

Our Independent Financial Adviser partners at ContractorFinancials can also help consolidate any other pensions you may have built up elsewhere and this can also be done with no set up fees whatsoever. This means that you can bring any existing retirement nest eggs into one manageable basket. The low annual management cost of the iBalance scheme could work out far cheaper than the charges of older style pension schemes.

Access your pension monies sooner than you think!

Even with those massive tax savings of up to 69%, Contractors may sometimes still be put off pensions as a savings vehicle because you have to wait until old age to access the funds. However, you could be able to get your hands on the funds sooner than you think though.

You have the option to release 25% of your pension as a tax free lump sum as soon as you reach age 55 (and still keep working if you wish). This allows iBalance clients to fund home improvements, pay off your mortgage or take that trip of a lifetime – literally from money that would have gone to the tax man had you taken a higher salary whilst at iBalance.

Who are ContractorFinancials?

They are Independent Financial Advisers who specialise in offering financial solutions tailored to the unique needs of Contractors. They work closely with iBalance to offer clients a complete financial planning service which also includes advice on other investments, contract based mortgages and protection.

To find out more about the tax benefits on offer using the iBalance Group Personal Pension Scheme call Andrew Gains or Kate Woodhatch at ContractorFinancials on 0845 062 8888 or email andrew@contractorfinancials.com for a no obligation illustration of the benefits.

Click here and submit their email address and contact number and we will do the rest!

* Once you’ve both completed 6 weeks payroll with iBalance.

If those workers then bring an AWR claim they may risk having their IR35 status challenged by a tax inspector and face significant tax claims exceeding the amount of AWR equal pay they are making.

This, and the likelihood that IR35 will remain for the time being, is the main reason why many people involved in the supply or use of agency workers are taking the view that personal service company contractors are very unlikely to bring AWR claims.

Feel free to contact me support@tempoaccounting.com or call on 0203 137 6462 for further information on how Tempo accounting can help.

The legislation will be introduced in the Finance Bill 2011, and become effective from 6 April 2011 onwards. The inclusion of anti-forestalling measures that became effective on the 9th December 2010 mean that from now payments of this type fall within the scope of the new measures.

The proposed legislation states that sums earmarked by trusts or other intermediaries will be treated as though it is a payment of income that is liable to PAYE tax.

Because of this ruling we believe that use of an EBT is no longer an option for your contractors.

If your contractors are using an EBT Company, then they should immediately consider their options as they have now been made a target by HMRC and with the wide ranging MSC legislation this could also prove risky for agencies who are continuing to use these services.

Be aware that EBT providers are trying to find a quick solution which could represent further danger!

How can iBalance/Tempo Accounting help?

We will contact your contractors and give them a personalised assessment of their options and the likely impact on their take home pay within a few hours. Click here to request a call back.

The services that we can supply you, subject to your requirements, will all meet the criteria below;

– No off-shore ‘tax avoidance schemes’; UK based services only
– Either limited company or umbrella company services
– No set up or leaving fees and no minimum contract period
– Unlimited advice for contractors by specialist consultants and accountants covering many different technical aspects

Please call 0203 137 64 62 now for a free consultation.

The conventional approach to signing and returning contracts (a combination of post / fax and email) is often the ‘bottle neck’ in an otherwise efficient placement process.

Larger big-budget agencies have been using “electronic signatures” to sign contracts for years, however SignatureSense’s low monthly subscription fee for agencies makes this modern business practice available to even the smallest of companies.

Alan Whitford, industry veteran and founder of RCEuro.com, the Pan European community site for recruiters, commented on SignatureSense:

“I think that this offering should be a ‘no brainer’ for recruitment businesses, where the time lost in the administrivia of contract administration can lead to lost revenue and poor client service.  The electronic signature ‘wrapper’ is ideal for confirming NDAs, Terms of Business and Contractor Agreements, all in real time. We will certainly be using the service for our future agreements at RCEuro.”

Jon Richardson, Founder of SignatureSense added:

“We are really excited to see that Agencies find such a direct benefit in using our service.  It’s only a matter of time before electronic signatures are common-place, so the ‘early adopters’ are making the most of a great competitive advantage.”

Derogation (or ‘Swedish’ Derogation) – Providing workers with 4 weeks half-pay (after working for 12 weeks)

The advantage of the first option is that it is much easier for the worker to understand. The downside is it has some extra work for the agency (but our online process will simplify this).

Its also worth pointing out that Limited companies that are in business in their own account are excluded from AWR, we now provide a Limited company service for contractors and SME’s.

Please also vote on this LinkedIn Poll linkedin.com.

Please do not hesitate to contact me should you have any questions.

Justin Phillips MIRP – 08450 543 222

With the Agencies Workers Directive now looming iBalance also recognises it is key that Agencies must now work closely with their payment providers to guarantee compliance.

iBalance agreements are straightforward and typically cover the following areas: -

Service levels

We can agree certain key service levels that may be important to you such as:

· Advance payments.

· Payment dates.

· Contract turnaround time for new contractors.

· Special compliance requirements (e.g. working time hours monitoring, pay levels).

· Online services (e.g. online timesheet management branded as your agency).

Contractor discounts

Depending on volume of business, we can provide attractive discounts available exclusively to your agency.

Revenue generation

With sole supplier agreements we can implement fee sharing schemes, where we agree a percentage of revenues go to your agency depending on number of workers. This can be between 15% – 55% of fee income.

If you are interested, could you give us an indication of the typical numbers of contractors you have and an idea on how you would like to structure the agreement? This is with regards to the balance between revenue and contractor discounts. Then we can provide a definite proposal.

Please call or email me if you would like to discuss this further:

Justin Phillips

Justin@iBalance.co.uk

Tel: 08450 543 222

• One large umbrella company – will pay same-day for an extra fee.
• Another large umbrella company – pay ‘same-day’ but on the day after receipt.
• Others – pay by same-day but only on one particular day per week.

iBalance pays same-day, every working day (we haven’t missed a day in over 15 years).

Our customer service promise is to pay contractors’ cleared funds into their bank account on the same-day we receive funds from their agency.

Unlike a permanent employee, many Contractors pay both employer’s and employee’s National Insurance on earnings.  This means that the 1% hike expected in April will have a noticeable effect on a Contractor’s take home pay.

The good news is that the iBalance Pension Scheme provides a great opportunity to reduce a contractor’s total tax deductions.

By transferring a portion of your income into the group pension scheme a basic rate tax payer saves upto 39%. Higher rate tax payers can save between 49% and 69%.

This ‘Salary sacrifice’ can counteract the 1% increase by reducing the Income Tax and NI normally paid on earnings.

Why Choose iBalance’s Pension Scheme?

iBalance works with IFA ContractorFinancials to provide a pension scheme with as much flexibility as possible, allowing contractors to change contributions to match a their contract’s earnings at any time. There is total freedom to decide how much is transferred and contractors can pause contributions at any time.

If a contractor decides to leave iBalance then the pension can either be left to grow, or closed completely with funds moved elsewhere.

The legislation surrounding annual allowances for pension tax relief are changing in April and the new allowance will be £50,000 (down from its current level of £255k).  However, this still offers significant scope for most investors.

Independent Advice Without Pressure

There are no set up costs when joining the iBalance group personal pension scheme and the pension advisers at ContractorFinancials are independent of any one company. This allows iBalance contractors to take advantage of a full review of any existing pensions in place.  Then, if it makes sense to do so, the advisers will assist in transferring any existing funds over to the iBalance pension.

To speak to a pension adviser about the iBalance group personal pension or for more information on the scheme, call 0845 062 8888 or email iBalance@contractorfinancials.com and an experienced pension adviser will be in touch.