IR35 change is coming in April 2020 – are you ready?

IR35 change April 2020

IR35 change is coming in April 2020 – are you ready?

IR35 is a complicated piece of UK legislation that attempts to close any loopholes in the tax system where workers could pay less tax by using a limited company structure.

Since 2000, contractors have self-assessed their IR35 status and National Insurance Contributions. However, this arrangement is widely regarded to be ineffectual with HMRC estimating that the cost of non-compliance could escalate to £1.3bn by 2024 in the private sector unless a change is made.

So, in April 2020, the rules governing the IR35 are going to be modified. From that time, the entity paying the contractor will be responsible for determining their IR35 status. 

These changes will have repercussions for both the contractor and the company paying the contractor, including IT contract recruitment agencies. For example, research reveals 65% of UK contractors believe their income will decrease following the changes.

However, if you hire contractors, the impact on your business could be significant. If you get things wrong, you could be liable to pay charges amounting to one-and-a-half times the total amount each contractor is paid. 

So, what do you need to do to prepare for these changes?

Inside the IR35 reform

The UK Government is planning to introduce the IR35 changes to the private sector in April 2020. If the IR35 does apply, your contractors may have to pay tax like an employee.

However, their employment status will not change. So, they will not receive the benefits and rights associated with permanent employment. But the first factor you need to take into account is whether your contractors sit inside or outside of the IR35 legislation.
 

Inside or outside? 

Whether you’re affected by the changes depends on whether your contractors work inside or outside of the IR35.

If they are outside the legislation, then you are not affected by the changes. However, we recommend you seek professional advice to ensure your contractors really do belong outside the IR35.

If they are inside the legislation, then you will be affected by the changes. These changes could also affect companies outside of the UK if, for example, you hire contractors that are tax-registered in the country.

When you are investigating whether a contractor is inside or outside the IR35, you will need to take the following factors into account:

  • How much control do they have over their place of work and hours, etc?
  • Do you provide their equipment?
  • Do they receive any employee benefits?
  • Could you substitute them for another qualified person?

However, such IR35 assessments are a minefield. We would always recommend you seek professional advice when determining a contractor’s IR35 status.

IT contract recruitment agencies

Are there any exceptions?

Yes. Not all businesses will be affected by the change, even if their contractors are inside the IR35. At the time of writing, the new rules may not apply to small businesses that have:

  • Turnover of £10.2 million or less,
  • A balance sheet total of £5.1 million or less
  • 50 employees or fewer.

Also, if you work with any IT contract recruitment agencies, bear in mind that they may be responsible for the IR35-related tasks.

However, there is much opposition to these changes and, as such, the rules may change. So, make sure you seek up-to-date and professional advice.

What should you do to prepare?

Whatever your circumstances are, we would recommend that you take the following steps to prepare for the IR35 changes:

  • Start by seeking IR35 specialist advice.
  • With a general election looming, remember to keep up to speed with any developments in IR35 legislation. 
  • Assess your current workforce.
  • Keep up-to-date records.

In conclusion

The changes to IR35 could have major repercussions for your business. If you would like some more guidance on IR35, or to discuss a variety of flexible resourcing options we can offer, please get in touch.

contact us

 
 

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5 tips for contractors who want to work remotely

5 tips for contractors who want to work remotely

Remote working comes with many benefits. It allows you to work in a location and at a time that suits you, and creates a better work life balance. 

Employers also benefit from having remote workers, with reduced office costs, a happier and more motivated workforce and a larger talent pool to recruit from. 

This doesn’t mean that all employers are already convinced though. Common concerns include employees slacking off, not integrating with the rest of the team and not getting work done to a high enough standard. 

If you’re looking for a remote position, we’ve pulled together some top tips to finding and winning remote contracts, as well as reassuring employers that you’re right for the job. 

Be clear up front about how you want to work

Being clear in your own mind as to how you want to work is the first step. Consider why  you want to work remotely, how much of a priority it will be for you, and how you would be willing to compromise. 

When you begin searching, some employers will state in the job description or to their recruiter that they are happy to consider a remote worker. 

Others may not mention it or may have indicated that they would prefer an in-house contractor. Don’t let this put you off though. 

Whether or not you already know where they stand or not, you should always mention your preferences up front. For the right candidate, some employers may make an exception. 

It also saves you both time in the long run, as an employer may have a valid reason why they cannot work with a remote contractor. Most of the time you’ll be able to find a compromise, possible an induction period on site, or a day a week where you travel to the office. 

Be prepared to answer questions honestly

While you might feel that you need an elaborate reason to work from home, it’s never worth making something up that you think the employer will accept. 

They need to know they can trust you, so if the reason is simply that you have a pet that needs company, don’t fancy the commute or just prefer working from home, be honest!

A good manager will understand that everyone works differently and has different priorities. 

You may also face questions about exactly how, where and when you will work. Again answer honestly but show you are willing to be flexible.

Ask questions in return about what they would need from you. For example,  the core hours they need you to be online or what software they currently use to stay connected. 

Consider skills that can make you more competitive

Take a look through your current resume and consider if there are any courses or skills that could make you stand out from the competition for a remote job. 

These could be courses linked to your job, to show you keep your knowledge fresh. It can also be useful to get training with recent technology, as you will probably have to depend more on technology to stay connected as a remote worker. 

Of course, useful skills don’t have to be related directly to your job. Many softer skills can help when it comes to remote working, such as organization, time management and effective communication. 

If a training course isn’t applicable, consider reading books and articles that you can work into conversation. Being able to confidently discuss a productivity method you use or some latest research on self motivation could swing the dial in your favour. 

Taking courses or upskilling in your own time also shows initiative and a proactive attitude, which can help you land that dream contract. 

Use an agency that has handled remote workers before

When you are searching for a job this can make a huge difference. Many contractors find work with the help of an agency or specialist networks like ClearHub. 

Talk to your contact at the agency to find out if they regularly place remote workers. It may be something they discuss with employers in their initial conversations, or they may be willing to broach it for you when they put you forward for the job. 

Having the support of a recruitment expert can be invaluable, as they can provide you insights of what the employer might want before you’re interview. 

They can also help you look at your options. For example working from home full time, using coworking spaces or splitting your time between the office and home. 

Don’t settle for a job just because it’s remote

The most important factor to consider when looking for remote work is still the job itself. Although you may be set on working remotely, taking a job just because it offers this may not be great for you in the long run.

If you aren’t passionate and happy with the work you are doing, you may find that working remotely becomes more of a chore than a benefit. Neither you or your employer will benefit in this situation. 

With remote work becoming more popular, and certain skills growing in demand, there’s no reason to settle for the first remote offer you get. 

Do you regularly work remotely? We’d love to hear about your experience of finding remote positions in the comments below!

 

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Rise & Grind, 5 Gig Economy Facts

Rise and Grind

Rise & Grind, 5 Gig Economy Facts

Remote workers have been able to work over the internet since the dawn of the digital age. It’s likely they had a massive impact on the rise of gig workers, opening the minds of employers to the concept of flexible working practises.

It looks as though temporary work is headed in the same direction, with more employers seeking help from freelance workers.

  1. 40% of organisations expect gig economy workers to join their workforce in the near future

With the gig economy on the rise, more businesses seem to be embracing the idea of freelance workers with corporations of all sectors now rapidly expanding their teams.

One of the reasons behind this is the money employers are saving not hiring full-time employees to fulfil business needs.

  1. 30% increase in gig-work platforms
    The rise in platforms advertising gig work comes as no surprise considering the increase in freelance workers. Business-minded individuals are seizing the opportunity to set up hubs for freelancers who want to advertise their talents to businesses seeking temporary workers. Of course such platforms existed prior to the increase but more are emerging, with some dedicated to niche sectors e.g. software contractors. We are a perfect example of this.
  2. 20% of freelancers say they’d prefer full-time employment
    Obviously gig work isn’t for everyone, but even with this in mind, a whopping 80% of gig workers wouldn’t return or opt for full-time opportunities; 45% of them state they’d seek to acquire new clients in order to meet financial goals if it came to it.

Freelancers tend to work longer hours for less. This doesn’t sound appealing to some, but for many the pros outweigh the cons, with flexibility being one of the main reasons why temporary work is preferred. This includes working from home, spending more quality time with family, having time to take online courses, voluntary work and so on. This has seen a shift in the working mindset, as the saying goes, you don’t live to work, you work to live.

  1. All industries have freelancers

Traditionally gig work has been associated with freelance writing, web development and information based jobs. However, with the benefits of the gig economy, people from all backgrounds are now entering the new era. Workers from all of these sectors and more can now be seen working on a freelance basis:

  • Graphic Design
  • Finance
  • Agriculture and Forestry
  • Transportation
  • Education
  • IT
  • Marketing
  • Admin
  • Sales
  • Healthcare
  • Construction
  1. Limitations in skill sets are no longer an issue when it comes to gig work

Prior to the rise of freelancers in the gig economy, many first time workers were put off by their own lack of expertise to even attempt to pursue freelance work, thinking employers would show no interest in them if they had no prior in-house experience.

With the increase in employers now seeking freelancers, this has widened opportunities and provided a boost in confidence for first time workers. I think it’s fair to say that the younger generation are more inclined to “be their own boss”, which is down to a change in attitude, and the emergence of the digital age. With freelancers having better access to resources, they can now work from anywhere in the world from any number of devices. This change in attitude is slowly passing on to open-minded members of the older generation.

Although skill-level is still important to many employers seeking temporary workers, they are becoming more open-minded with the change in attitude.

Is there a downside?

Gig workers are charging more for their services and businesses are paying what they’re asking because they know hiring a permanent employee actually costs them more in the long-run.

As a result of higher fees for highly-skilled freelancers, individuals starting out are charging less for their work. Although this can be seen as a positive in that it increases their chances of success in finding temporary work, the danger sits in the fact that they are also vulnerable to exploitation, with some employers paying far less than what they should be.

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Podcasts Galore

Podcasts Galore

Podcasts Galore

We bring you… all podcasts related to ClearHub below!

In October 2018, we brought Chief Innovation Officer Simon Wood from ClearHub, and Senior Technical Trainer Paul Christie from Clearvision together, to discuss all things training, consultancy and ClearHub. Using real life examples to demonstrate how both businesses provide transformations and more, Paul and Simon reveal everything one needs to know to better their software.

In March 2019, ClearHub’s Chief Innovation Officer Simon Wood and Chief Revenue Officer Paul Renshaw, got together to discuss the emergence of the gig economy in all its forms. With more millennial’s seeking contract work, Clearvision’s sister company ClearHub is only expected to grow with the times. Using both personal and professional examples, Simon and Paul take a deep dive into the matter, leaving little to the imagination in this part 1 debate. For anyone interested in taking up contract work now or in the future, this podcast is a must!

And now, as of May 2019, listeners can enjoy Chief Innovation Officer Simon Wood and Chief Revenue Officer Paul Renshaw, as they continue their discussion on the emergence of the gig economy in all its forms. With more people seeking contract work, Clearvision’s sister company ClearHub (responsible for connecting businesses with the best Atlassian contractors out there) is only expected to grow. Using both personal and professional examples, Simon and Paul take a deep dive into the matter, leaving little to the imagination in this part 2 debate. For anyone interested in taking up contract work now or in the future, this podcast is a must hear!

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How The Gig Economy Is Serving Women & What This Means For Us All, By Patrick Foster

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How The Gig Economy Is Serving Women & What This Means For Us All, By Patrick Foster

Your stance on the gig economy will depend entirely on your personal and professional circumstances. Some people choose to focus on the negatives — e.g. the lack of job security, and the effect of sites such as Upwork and Fiverr on the perceived value of work — but that’s not the only viable perspective.

ClearHub

Indeed, plenty of people see the gig economy as a good thing: existing freelancers, for instance. With the tech industry being largely dominated by men, the number of females joining the tech force is increasing. The same can be said for the gig economy. But how is the gig economy serving women in particular? Looking at the wider picture of employment, what significance does the answer hold to the workforce in general? Let’s answer these questions:

 The rise of flexible and remote working

There was a time when holding a position in a white-collar industry meant adhering to a 9-to-5 routine under glaring fluorescent tubes in an open-plan office. This wasn’t ideal for anyone, but few businesses were willing to buck the trend, and there weren’t any practical alternatives to the office arrangement. You needed the team together, in order to get things done.

Fast forward to the modern internet-connected world, and you see something of a revolution regarding working patterns. The gig economy has pushed flexible working (choosing your hours, either significantly or completely) and remote working as a consequence: when your team members aren’t working the same hours, and can work from laptops, then you don’t really need them in the same location. Team communication tools such as Slack, make instance communication possible.

Remote working has made uncomfortable office environments comfortable once more, for men and women, by allowing them to work in a space that best suits them. For women, uncomfortable office environments can be as a result of a number of factors, including sexual harassment, unequal pay, sexism and so on.

Self-employment and entrepreneurial opportunities

The changes of the gig economy haven’t only affected conventional part-time or full-time employment — they’ve expanded the opportunities available to those who don’t want to be limited by full-time employment. Freelancers in particular are taking advantage of technology, be that by promoting themselves, pitching to prospective clients, or fulfilling their duties from anywhere.

Consider the case of Camille Newman, an entrepreneur who tested the waters with a pop-up fashion business before moving her operation online (read about her female entrepreneur success story here).

In essence, this all adds up to a simple truth: if you’re trying to get ahead without needing to rely on the support or goodwill of others, you have plenty of avenues available to you. Consequently, women who’ve previously felt excluded and alienated can truly make their own future — a study in early 2019 found that 72% of self-employed women feel that they’re in their dream jobs.

How sporadic workloads suit many women

If a skilled professional in the early stages of a regular full-time career decides to start a family, she’ll likely get mandated support, but missing working time might negatively affect her prospects.

With a flexible working schedule, it’s possible to balance pregnancy, and birth and child-rearing with career demands — what ultimately matters is that you get the job done to a high level of quality, and if that happens, then how and when it happens won’t matter as much. Tara Gentile, for example, started a website and purchased a blog six months after giving birth, and was quickly making more money than she’d been making before.

The broader impact on the employment world

The gig economy has made it possible for any woman who wants to start her own business to pursue her dream without external investment or support. It has given a significant boost to flexible and remote working, which is good for women who prefer to stay out of conventional offices (as well as those who want to balance other parts of their lives with their careers).

This, as you’d expect, is affecting the employment world in general to a major extent. Today’s employers are having to adjust their requirements and procedures to become more appealing to workers (both women and men) who’ve become accustomed to more flexible and supportive working arrangements.

With women finding it easier and more rewarding to go into business for themselves, we’re seeing the knock-on effects ripple throughout the business world. Companies are becoming more empathetic, community-driven, and committed to diversity — and performing better while doing so.

Whatever your thoughts, the gig economy is pushing things in a good direction for women in the workplace. It embraces versatility, flexibility, and self-direction. Today, any woman who wants to become a success in the business world can achieve her dreams without support from anyone.

Have you considered working as an IT contractor? Visit https://clearhub.tech/find-it-contractor-jobs/.

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How to Get Ahead in the Gig Economy

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How to Get Ahead in the Gig Economy

If you’re interested in contracting you’ve probably seen a fair amount of coverage in the news about the gig economy.

These articles usually focus solely on either the downsides or benefits of the gig economy, and portray it accordingly as either modern slavery or the answer to a happy work life.

If you’re an established contractor, just starting out or maybe considering if contracting is the right path for you, it can be overwhelming trying to wade through all this mixed information, and it may leave you feeling that success in the gig economy is becoming more and more elusive.

We’ve used our own experience with contractors to present what you’ll need to know about the gig economy, what risks you should be aware of and some key tips to succeeding as a contractor.

In a Hurry? Skip ahead to the most relevant section

The truth about the gig economy

Although people frequently use the term “gig economy worker” for anyone who works on short term projects or contracts, they rarely make any sort of distinctions, whether its between freelancers (multiple ongoing clients, often a variety of types of work), contractors (one client at a time, fixed contract, normally one main specialism) or workers (short-term, casual or agency workers, zero hour contracts).

The idea of “gig” work is often portrayed as a new phenomenon, but in reality it has only been expanded by new technology and ideas that make it more easily available to everyone; for example, apps like Uber.

Much of the negative press stems from the idea that people are being forced into self-employment when the nature of their work is really as an employee e.g. workers who would prefer not to be on zero hour contracts.

However, this does not change the fact that for many highly skilled specialists, contract work is still a viable, rewarding and sustainable way to earn a living. And finding success as a contractor is not as hard as you might think.

Defining success

Before starting any project, you would make sure you understood the end goal, right?

It helps you to stay on target, keeps you motivated and justifies your decisions.

You should think about your career in a similar way. Consider what you want to get out of your work and how contracting can help you achieve that. Chances are, if you are or want to be self employed, this may be fairly different to the goals of people who prefer full-time employment.

Create a list of aspirations and use these to define a success statement. You can remind yourself of this statement when considering new opportunities, feeling unmotivated or struggling with your projects. It will help to remind you that success looks different for everyone, and it is more important to hold yourself to your own standards than anyone else’s.

Avoiding common pitfalls

Once you’ve established where you fall in the gig economy and what you want to get out of it, you can then begin to identify the possible risks and difficulties you may face.

Being realistic and aware of potential problems means that you can work to prevent or prepare for them. Some may be specific to you or your industry, but we’ve identified some of the common issues or mistakes that contractors make to help you avoid them.

Poorly managing finances

For many contractors starting out, a major concern we hear time and time again is how they will manage their finances with an unpredictable income.

Of course, one of the main attractions for contractors is that the work is often better paid. A DevOps contractor, for example, could earn an average of £550 a day.

If you can manage your money cleverly, you should have no problem compensating for quieter periods of work and other added expenses with the money you earn during busy periods.

There’s a wealth of information out there on what you need to be aware of financially when contracting, but we’ve distilled this down into three key tips:

  • Prepare for your taxes. This one’s a no-brainer. Whatever you earn, put 20% to one side to cover your taxes. It’s better to have oversaved than under saved when that tax bill comes through.
  • Make hay while the sun shines. Another simple one. Work may be sporadic, and you will certainly notice periods of higher and lower demand. Budget yourself so that the money you make at your busiest will cover you when you’re in a quieter period.
  • Save for unexpected complications. No one likes to think of themselves getting sick, or being unable to work. But as a contractor, you have to be your own safety net. We suggest trying to save enough money to cover your living costs for at least 6 months, or looking into unemployment insurance, to give you peace of mind.

Thinking like an employee

It can be hard when you first start contracting to change your mindset from that of an employee to someone who is self-employed. But thinking like an employee can be detrimental to your contracting career.

Once you understand that you are not dependant on others for your income and take full responsibility for your own career, you will feel more confident.

Try and run yourself as a business, considering all areas that a traditional business would have and adapting them to yourself. Have you got a plan in place for managing your finances, marketing yourself and selling your services alongside your everyday work?

Saying ‘yes’ to everything

Many new contractors often take the saying “make hay when the sun shines” to mean they should accept every opportunity they are offered. However, if your aim is for a long term, successful contracting career, this may not be your best option.

Be realistic about the work you want to do, the income that it will generate and the experience every opportunity will give you. As a new contractor, you must find the balance between being so picky you can’t earn a living, and so broad that you never define your niche.

Undervaluing yourself

Another common mistake contractors make is selling themselves short. The fear for many contractors is that if you charge too much, your clients will simply find someone else.

What you need to remember is that you have specialised skills that these clients need. If they are going to make you an offer at all, it is because they see you as a good match for their project, and most employers are willing to pay for the right person.

Don’t be afraid to negotiate with your clients, but remember to be flexible too. Most of the time you will agree on a reasonable rate that works for you both.

At ClearHub, we regularly enter into salary negotiations on behalf of our contractors, and work hard to ensure that they are offered a fair market rate for the specialised skills they provide.

How to improve your work performance

Once you’ve mastered the basics of building a successful contracting career, you can begin to look at ways to increase your productivity, value and job satisfaction even further.

We know that when you’re self employed, time is money. So we’ve put together some top tips for increasing productivity and saving time.

Create a holding environment

This is a great strategy for improving the way you work, and the chances are you’re already partly implementing it. It involves creating a mental and physical environment that allows you to do your best work, and it helps to keep your personal life and your work life defined.

You may be working primarily from home, or working on multiple sites with different clients, but you can still find a way of creating a ‘space’ that works for you.

It may be a home office that you’ve set up for the sole purpose of working, or it could be a set of routine you use to prepare yourself for work. It can involve identifying a higher purpose that allows you to connect to your work, or interacting with specific people you associate with work.

Essentially this replaces your traditional office, colleagues and routine that subconsciously put you in the right frame of mind to work.

Invest in yourself

Our Head of Innovation, Simon Wood, recently wrote a blog on the importance of reskilling, and it’s something we think every contractor should be aware of.

As a contractor, you are your own biggest asset, and you shouldn’t be afraid to invest time and money in developing your own skills.

To save time: Register with an e-learning platform, such as Lynda, and leverage the ability to hone your skills around your busy schedule.

Keep up to date with your industry

Another great way to remain relevant is to keep up to date with what’s going on in your industry. Not only would it look bad in an interview to not know about major changes or breakthroughs, but you can leverage the knowledge to help you find new opportunities, or decide what areas to train in.

To save time: Use a tool such as feedly, that sends you news updates on whatever topic you choose, as a quick and easy way to keep track of what’s going on.

Manage your network

I’m sure most of you have heard the phrase “Your network is your net worth”, coined by Porter Gale to emphasise the importance of a strong portfolio of contacts.

For a contractor, these connections can be seen as security for your future. They could provide the chance for new opportunities, become advocates for your personal brand or offer support and guidance when you find yourself struggling.

If you’re still in the early stages of contracting, it may be beneficial to engage with an existing network that’s relevant to your skillset.

ClearHub offers it’s contractors the chance to get in front of some industry leading contacts, and saves them the time they’d spend managing their own networks.

To save time: Try a tool like Buffer, which lets you batch schedule content to post out on your social media. It can help you keep front of mind and engaged with your network, without taking up too much of your time.

Embracing change

For many people, the move into contracting is scary. You may feel like you have to give up your security or take a step down. But the reality isn’t scary – contracting is just a different way of working.

To be successful you have to accept that you are no longer an employee of someone else, and need to start running yourself and your time as a business. It may mean more responsibility and you may find that you have to develop new skills to be successful. But it can also mean more autonomy, more job satisfaction and often more income.

If you’re a technical contractor looking for more opportunities or advice, get in touch with us or take a look at some of the benefits ClearHub offers for contractors. We’ve already helped contractors find positions in companies like Fox and UBS, and we are always looking for contractors to fill our exciting new positions.

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Do you have any advice for other contractors? We’d love to hear from you! Comment below or send us an email!