Self-employment and contractor news for 2014

There are many positive things about being self-employed and working as a contractor.

11:42 05 March 2014

Self-employment and contracting gives the individual a huge amount of control over their career direction, can lead to a wide range of experience in a relatively short time and allows them to optimise their work/life balance. However, as in most things in life, there is compromise involved.

Being self-employed also requires the contractor to keep in touch with relevant legal, administrative and other changes, and often to take action to comply with these. This can be a challenge, given that most contractors are already very busy doing the 'day job'.

Changes for 2014

So what should contractors be aware of this year? Obviously, much will depend on the type of work they do, but some examples of relevant changes due in 2014 include:

•    In March 2014 the Personal Services Companies committee will publish recommendations. This is a report from the select committee that was established to investigate the use of one-person limited companies - and their associated tax benefits - in both the private and public sectors. Clearly, this will have implications for any contractors working under such arrangements.
•    The Budget will be published on the 19th March.
•    A range of tax and related allowances and thresholds take effect from April.
•    April will also see changes to pension contributions allowances, which will affect many contractors.
•    The Banking Reform Bill will take effect during 2014, and consequently massive changes to UK banking are expected.
•    Controversial new rules from HMRC, around 'false self-employment' take effect from April.

Not just financial

Not all changes due this year are concerned with finance. Other issues that contractors need to be aware of during 2014 are:

•    Imminent changes to health and safety rules applicable to the self-employed in the UK.
•    The Labour Party is conducting research on ways to support creative industries.
•    Various countries look set to follow Switzerland's example, and consider restrictions on contractors from overseas.

How can you manage it?

Having so much to manage and keep track of is perhaps one of the biggest challenges that faces new contractors. Although there is a great deal to be gained from going freelance, it can be daunting to have so much responsibility resting on just the one pair of shoulders. That factor is likely to become even more important as the UK's economy picks up and the amount of work available to pursue, increases. Most contractors, after all, would rather be out there earning money than sitting in the office completing their (unpaid) administration.

One solution, used by many in this position, is to turn to an umbrella company such as Crystal Umbrella. By using an umbrella company, contractors can free up a large amount of time, that would otherwise be spent on research and administration, and use it to earn money instead. Given that an increasing proportion of the UK workforce is now self-employed, making the market more competitive than ever, the advantages of using an umbrella company can often give contractors that extra edge they need.