Being a contractor can be difficult enough as it is without having to try and juggle finances. Trying to find work and keeping your eye on the job market can be very time consuming, and having to then put time and effort into managing your finances can be one headache you could do without. This is why a contractor payroll solution can be extremely valuable, offering freelancers and contractors the ideal support to ensure that paperwork and tax returns are carried out efficiently and accurately.
After 2000 saw new IR35 legislation brought in, many freelancers and contractors started having their payroll handled through a third party umbrella service provider. Many lucrative freelance contracts involve terms and conditions meaning that contractors effectively become temporary clients. However, tax returns and paperwork still have to be carried out by freelancers, and you may find that you have little time to carry such processes out.
Using a contractor payroll solution is effectively a means of outsourcing your tax and other paperwork to another company for a small fee. All the administration of your paperwork will be handled and you can have peace of mind that your finances are being looked after whilst you search for more work and carry out lucrative new contracts. This is often the best form of ensuring that your PAYE contributions are correct and that you’re staying within all the necessary HMRC tax regulations, avoiding costly fines which could make your financial situation worse.
There are a wide range of umbrella payroll companies which you can use, and there are some who are more flexible to your requirements than others. Not all freelancers are the same, nor are all contracts, and so being able to utilise a varied management fee is often hugely advantageous. You can never be quite sure of what the next contract will require, and so by utilising a firm who has a flexible fee by week or month, you can ensure that you’re not paying out too much for financial administration fees. Meanwhile, some of the larger companies will also offer immediate processing of income rather than waiting for specific payroll dates each month. This can be extremely useful if you’re working a number of varied contracts, helping you keep a good cash flow and avoiding troublesome areas of the month where you may be running short of funds.
Another huge advantage of utilising an umbrella payroll solution is the access to workers rights. As a freelance you will miss out on the employee rights which are provided by most employers, instead having to shoulder all responsibilities yourself. However, contactor payroll solution companies can offer full statutory employment rights to freelancers, including both sick pay and maternity pay.
Utilising a contractor payroll solution can have huge benefits for your income and peace of mind. Whilst you’re assured that all tax returns and receipts are being cared for, you can avoid fines and put efforts into your career. And by using such services you’ll have time to put your career on a winning path.