why freelancing? infographic

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Post on 08-Aug-2015

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  1. 1. The of becoming a Freelancer Why,What, How & Where Taking the plunge and opting to become a freelancer is an exciting yet daunting career choice, so here's some advice to help ensure everything runs smoothly and successfully. Why become a freelancer? To achieve a better work/ life balance To escape the 9-5 routine To be in control of your workload and productivity levels Extract your income efficiently Deciding to become your own boss is the first step, next you have to choose whether you will operate as a Limited Company, Sole Trader or use an Umbrella Company. How will you operate? To boost your net income To claim business expenses Sources Boox Contracting Guide: http://www.boox.co.uk/contractor-limited-company/ Sole Trader Simple to register All the profits are yours You are liable for your firm's debts No registration fees File self assessment return Savings and assets such as your home are at risk Not essential to have an accountant but advisable Profits taxed as income Pay class 4 national insurance on profits Pay class 2 national insurance Umbrella Company These include tax and National Insurance contributions on a Pay As You Earn (PAYE) basis Setting up in this way is quick and easy You pay the umbrella a fee each time you are paid Payments have to go through a third party before they get to you Take home pay is between 67-76% the value of your contract Control is in the Umbrella Company's hands, you are reliant on them to collect your money You become an employee of an umbrella company Your services are contracted out by them The company will invoice your client directly You will be paid by the umbrella company once the necessary deductions have been made Limited Company Register with Companies House More rules & paperwork Profits relate to the company File self assessment return for director(s) Need Profit & loss account, balance sheet and notes Pay corporation tax return online SUBMIT Submit corporation tax return online Pay class 1 national insurance on any salary Liable for amount of share capital Take income as salary, dividends and reimbursed of expenses Share ownership of the company and dividend income with your spouse Make more of your profits through better tax planning Vs Vs Become a freelancer in 5 easy steps Learn about IR35 See our guide for more in-depth advice and information on beginning your career as a contractor. Set up your Limited Company and bank account Take the hassle out of your finances with an online accountant Choose how to operate Find work What are the key things to consider? Moving from permanent employment to contracting means you have to: Plan for sickness File annual accounts at Companies House Submit your own personal tax returns Chase payments Submit Corporation tax, VAT and PAYE returns Register your business Plan for holidays For Limited Companies