Why freelance?

fatboydaz

Hi All,

My new employer is offering me a contract of £50k but would prefer if I signed a freelance agreement instead. This leaves me with no security so I opted for a salary however I am wondering apart from the fact that he could terminate my contract at any time, not pay for my sickness what other cost advantages as an employer does he get? 

Thanks

Penguin_

They don't have to pay for your holidays, pension, employers National Insurance if you go freelance.

fatboydaz

How much would the National Insurance cost him on a 50k Salary thanks?

DullGreyGuy

fatboydaz said:

My new employer is offering me a contract of £50k but would prefer if I signed a freelance agreement instead. This leaves me with no security so I opted for a salary however I am wondering apart from the fact that he could terminate my contract at any time, not pay for my sickness what other cost advantages as an employer does he get? 

In my line of work it's all about who you can get.

In principle for the first 2 years of employment you can be gotten rid of quickly anyway and so contractors and perms dont really have that much difference if you really want to bring someone in for 18 months to do a specific piece of work.  There can be a question of reputation you develop if you keep bringing perms in for a short stint which may make future Recruitement harder whereas contractors expect to be short term.

In terms of monies... as long as the freelancer is sensible in the rate they demand there won't be that much in that either and it can go either way to which is the more expensive. Day rates are higher but there is no sickness, holiday, pension contributions, bonuses etc which means the gross of both is similar. 

Obviously some people aren't in a position of negotiation and get only a token uplift for going freelance, if anything, and so are taking on the risk without the reward. 

Marcon

fatboydaz said:

How much would the National Insurance cost him on a 50k Salary thanks?

https://www.gov.uk/national-insurance-rates-letters

penners324

Have you asked the company about IR35?

If it's your only employment they may well fall foul of IR35.

MeteredOut

When you say "freelance", what do you mean? Are you self-employed, employed via an agency, via an Umbrella, some other form?

Be very clear on what you're signing up to, as, for example if you go via an Umbrella, you'll end up paying both employee and employer NI.

Cromwell77

I have contracted and been on PAYE I prefer contracting, I earned a lot more money could go on holiday for as lomas I wanted between contracts and got paid for all overtime. The additional money I earnt covered the shortfall in benefits and sim pay etc I was earning probably three times the amount of pay I would have earnt o. PAYE