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FT PAYE to freelance
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By (user no longer on site) OP
over a year ago
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Yeah, probably not the best place to ask for advice on this but the forums are diverse if nothing else.
Anyone changed from a fulltime salaried position to freelance?
How did you go about it?
Seeing what I could earn WFH freelance compared to what I earn in my current position is quite depressing. |
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By (user no longer on site)
over a year ago
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I went from part-time paye and work freelance now. Most people I know who went from full-time did work on the side for a while before they bit the bullet.
There are some great freelance business groups around eg Being Freelance (they have a podcast too I think) |
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Yes, I went from full time employment to part time self employed. It worked but I also had my ex who had a full time, well paying job so we had a safety net.
If you think you can make it work and have the safety net to keep you going especially in the early days then go for it. |
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By (user no longer on site) OP
over a year ago
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"Isn't 'could ' the operative word here?
Giving up a guaranteed salary is something I'd need to consider really carefully "
Yeah, that's why I'm going through the motions now.
Could is correct, but the daterate starts at almost twice mine (obviously with more caveats like annual leave and pension). |
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By (user no longer on site)
over a year ago
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Annual leave, sick leave, pension, insurance, invoicing, sales time (finding clients), marketing. I didn't take into account how much would be "running a business" in addition to doing the work. |
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By (user no longer on site) OP
over a year ago
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"Annual leave, sick leave, pension, insurance, invoicing, sales time (finding clients), marketing. I didn't take into account how much would be "running a business" in addition to doing the work. "
I've done it before BUT I didn't have a job at the time and didn't have much in the way of financial responsibility.
This time I'd get my work directly from agencies rather than hunt around myself.
Probably should chat with them a bit more. |
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By (user no longer on site)
over a year ago
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"Annual leave, sick leave, pension, insurance, invoicing, sales time (finding clients), marketing. I didn't take into account how much would be "running a business" in addition to doing the work.
I've done it before BUT I didn't have a job at the time and didn't have much in the way of financial responsibility.
This time I'd get my work directly from agencies rather than hunt around myself.
Probably should chat with them a bit more."
Agency work means less autonomy but more security - could be good! Can you do some work for them whilst still working f/t just to test the waters? |
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"Isn't 'could ' the operative word here?
Giving up a guaranteed salary is something I'd need to consider really carefully
Yeah, that's why I'm going through the motions now.
Could is correct, but the daterate starts at almost twice mine (obviously with more caveats like annual leave and pension)."
Being self employed has its positives and negatives. You'll be able to claim tax relief on certain things such as vehicles phone use if your home as an office etc. Some of this offsets the lack of employed benefits. Also if you'd be looking at taking out a mortgage you need 3 years accounts rather than 3 months payslips. |
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By (user no longer on site) OP
over a year ago
|
"Annual leave, sick leave, pension, insurance, invoicing, sales time (finding clients), marketing. I didn't take into account how much would be "running a business" in addition to doing the work.
I've done it before BUT I didn't have a job at the time and didn't have much in the way of financial responsibility.
This time I'd get my work directly from agencies rather than hunt around myself.
Probably should chat with them a bit more.
Agency work means less autonomy but more security - could be good! Can you do some work for them whilst still working f/t just to test the waters? "
I did consider that but my job is sooo busy as it is! I think it will end up being the best avenue if I can somehow get deadlines over weekends or soemthing. |
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By (user no longer on site)
over a year ago
|
"Annual leave, sick leave, pension, insurance, invoicing, sales time (finding clients), marketing. I didn't take into account how much would be "running a business" in addition to doing the work.
I've done it before BUT I didn't have a job at the time and didn't have much in the way of financial responsibility.
This time I'd get my work directly from agencies rather than hunt around myself.
Probably should chat with them a bit more.
Agency work means less autonomy but more security - could be good! Can you do some work for them whilst still working f/t just to test the waters?
I did consider that but my job is sooo busy as it is! I think it will end up being the best avenue if I can somehow get deadlines over weekends or soemthing."
Or annual leave maybe? Might be worth it if you're planning to do this for several years. |
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By (user no longer on site) OP
over a year ago
|
"Annual leave, sick leave, pension, insurance, invoicing, sales time (finding clients), marketing. I didn't take into account how much would be "running a business" in addition to doing the work.
I've done it before BUT I didn't have a job at the time and didn't have much in the way of financial responsibility.
This time I'd get my work directly from agencies rather than hunt around myself.
Probably should chat with them a bit more.
Agency work means less autonomy but more security - could be good! Can you do some work for them whilst still working f/t just to test the waters?
I did consider that but my job is sooo busy as it is! I think it will end up being the best avenue if I can somehow get deadlines over weekends or soemthing.
Or annual leave maybe? Might be worth it if you're planning to do this for several years. "
This is true. I need to do a things first before I even dip my toe - just seems like the way to go for the future. |
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By (user no longer on site)
over a year ago
|
"Annual leave, sick leave, pension, insurance, invoicing, sales time (finding clients), marketing. I didn't take into account how much would be "running a business" in addition to doing the work.
I've done it before BUT I didn't have a job at the time and didn't have much in the way of financial responsibility.
This time I'd get my work directly from agencies rather than hunt around myself.
Probably should chat with them a bit more.
Agency work means less autonomy but more security - could be good! Can you do some work for them whilst still working f/t just to test the waters?
I did consider that but my job is sooo busy as it is! I think it will end up being the best avenue if I can somehow get deadlines over weekends or soemthing.
Or annual leave maybe? Might be worth it if you're planning to do this for several years.
This is true. I need to do a things first before I even dip my toe - just seems like the way to go for the future."
It can be fantastic. I went freelance when I was made redundant and I find it very lonely and isolating. I think joining a business group of some kind can offset that though. |
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By *rMonkeyMan
over a year ago
Somewhere |
I started my own LTD company ~7 years ago. It's not that hard to start, depending on your area of expertise the abundance of work will vary as will the rate you can charge. I'll never go back to a salaried position. I pay a good accountant to sort that side of things, I just worry about running the other side of the business.
Compared to my salaried position the amount I make is a lot more. |
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"Annual leave, sick leave, pension, insurance, invoicing, sales time (finding clients), marketing. I didn't take into account how much would be "running a business" in addition to doing the work.
I've done it before BUT I didn't have a job at the time and didn't have much in the way of financial responsibility.
This time I'd get my work directly from agencies rather than hunt around myself.
Probably should chat with them a bit more."
Depending on the work you do, many agencies will have you on PAYE. Teaching agencies effectively employ the teacher directly then contract them out to schools/colleges, but unsure if this holds true for you. You'd then accrue holiday pay for each hour you work, usually paid at certain points in the year automatically, some agencies pay SSP after a certain length of assignment but am unsure about pension provision. |
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By (user no longer on site) OP
over a year ago
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"Also if you'd be looking at taking out a mortgage you need 3 years accounts rather than 3 months payslips. "
Does that include remortgaging?
Mine's up in just over 2 years, and sorting the transition will probably take 6-12 months.
Seems shitty I have to hold off. |
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By (user no longer on site)
over a year ago
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Most Day rate contracts are inside IR35 now. Which means you'll likely need to pay an umbrella company to make the PAYE and NI deductions.
..
So you won't have to register as a sole trader or Ltd company. |
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By (user no longer on site) OP
over a year ago
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"Most Day rate contracts are inside IR35 now. Which means you'll likely need to pay an umbrella company to make the PAYE and NI deductions.
..
So you won't have to register as a sole trader or Ltd company."
Interesting... will ahve to do some more homework.
Cheers. |
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"Most Day rate contracts are inside IR35 now. Which means you'll likely need to pay an umbrella company to make the PAYE and NI deductions.
..
So you won't have to register as a sole trader or Ltd company."
IR35 depends entirely upon the nature of your work and what you’re offering a client; no disrespect intended, it’s disingenuous to suggest “most day rates are inside IR35” because for a lot of fields that isn’t true.
That said, IR35 is a key variable that needs to be considered, the quick and dirty solution is to have more the one client, that way you’re not a disguised employee; but I’m not an expert so I’d buy some advice in your field or check out anyone who posts about the subject on LinkedIn et al.
As others have said, a LTD company is the easiest way to go and a good accountant (which isn’t as expensive as it sounds).
From personal experience I wouldn’t waste any time thinking about the impact of annual leave or sick pay, all of my clients expect me to take leave with notice and the increase in income significantly outweighs the financial impact of not being paid holiday, private health insurance isn’t ridiculous plus it’s a tax offset.
Mortgages/loans or anything related to borrowing money is a challenge, the rules of the game are significantly different to being PAYE so if this is a variable then for sure buy some advice before quitting or changing the day job!
Best decision I ever made, 15 years and counting, I’ll never be a ‘house cat’ again!
For clarity, I’m quoting my previous UK experience, I now live permanently overseas! |
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By (user no longer on site) OP
over a year ago
|
"Most Day rate contracts are inside IR35 now. Which means you'll likely need to pay an umbrella company to make the PAYE and NI deductions.
..
So you won't have to register as a sole trader or Ltd company.
IR35 depends entirely upon the nature of your work and what you’re offering a client; no disrespect intended, it’s disingenuous to suggest “most day rates are inside IR35” because for a lot of fields that isn’t true.
That said, IR35 is a key variable that needs to be considered, the quick and dirty solution is to have more the one client, that way you’re not a disguised employee; but I’m not an expert so I’d buy some advice in your field or check out anyone who posts about the subject on LinkedIn et al.
As others have said, a LTD company is the easiest way to go and a good accountant (which isn’t as expensive as it sounds).
From personal experience I wouldn’t waste any time thinking about the impact of annual leave or sick pay, all of my clients expect me to take leave with notice and the increase in income significantly outweighs the financial impact of not being paid holiday, private health insurance isn’t ridiculous plus it’s a tax offset.
Mortgages/loans or anything related to borrowing money is a challenge, the rules of the game are significantly different to being PAYE so if this is a variable then for sure buy some advice before quitting or changing the day job!
Best decision I ever made, 15 years and counting, I’ll never be a ‘house cat’ again!
For clarity, I’m quoting my previous UK experience, I now live permanently overseas! "
Appreciate that. Thank you.  |
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By *rMonkeyMan
over a year ago
Somewhere |
"Most Day rate contracts are inside IR35 now. Which means you'll likely need to pay an umbrella company to make the PAYE and NI deductions.
..
So you won't have to register as a sole trader or Ltd company.
IR35 depends entirely upon the nature of your work and what you’re offering a client; no disrespect intended, it’s disingenuous to suggest “most day rates are inside IR35” because for a lot of fields that isn’t true.
That said, IR35 is a key variable that needs to be considered, the quick and dirty solution is to have more the one client, that way you’re not a disguised employee; but I’m not an expert so I’d buy some advice in your field or check out anyone who posts about the subject on LinkedIn et al.
As others have said, a LTD company is the easiest way to go and a good accountant (which isn’t as expensive as it sounds).
From personal experience I wouldn’t waste any time thinking about the impact of annual leave or sick pay, all of my clients expect me to take leave with notice and the increase in income significantly outweighs the financial impact of not being paid holiday, private health insurance isn’t ridiculous plus it’s a tax offset.
Mortgages/loans or anything related to borrowing money is a challenge, the rules of the game are significantly different to being PAYE so if this is a variable then for sure buy some advice before quitting or changing the day job!
Best decision I ever made, 15 years and counting, I’ll never be a ‘house cat’ again!
For clarity, I’m quoting my previous UK experience, I now live permanently overseas! "
What he said^^
The contractor market has settled and there is an abundance of work outside IR35 at very good rates too. Easy to keep yourself firmly outside.
Earning potential can be from 2 times to 4 or 5 times more than a salaried position so not much need to worry about holidays, sick pay, pension contributions etc.
You also have a huge amount of flexibility. I known many people who only work 6 months of the year and are selective about what contracts they take.
A good accountant who deals with outside IR35 is well worth the fee, can save you thousands a year.
If you dont mind me asking what is your field of work?
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"I was a contractor for 5½ years and spent two of those years unemployed.
It's all about having skills that are in demand. What is the skill set you are offering? "
Graphic design, three messages upwards!
OP isn’t talking about being a contractor, that’s a completely different type of employment than freelancing; aka selling your unique set of skills to the highest bidder! |
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By (user no longer on site)
over a year ago
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It is all checks and balances, things have changed since l became self employed due to constant layoffs and redundancies .Advice from a professional wasn't really needed in my line of work then,just a phone call to HMRC.
If you are very good at what you do then demand is there, your reputation and good name can get the success you want plus flexibility and hard graft and luck too!
Are you prepared for the challenges ahead ,money and work wise, financial and family commitments, legal and tax stuff.
It could lead to massive things ,as well as happiness and a stress free life if you succeed.
Whatever you decide you have the control mostly ,thats worth the effort, good luck if you decide to go ahead!
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A very quick google suggests a decent amount of work between 300-400 daily on a remote basis outside IR35.