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Setting up as freelance contractor

  • 05-09-2013 3:33pm
    #1
    Goodshape
    Registered Users Posts: 8,488 ✭✭✭


    Finishing up with my current employers at the moment and looking towards what to do next. Contracting / freelance seems a very attractive option to me for the next year or so, longer if it goes well.

    But, I've always been dreadful at the finance/management/compliance side of things. So much so, I'm not even sure what words to use to describe what I need :P

    Basically, I want to be autonomous, I want to make money, I want to pay whatever taxes or do whatever needs to be done to "stay legal" and avoid a call from revenue, or fines, or worse a year or so down the line.

    Last time I tried to do this seriously I basically got so annoyed with the complicated and seemingly inefficient bureaucracy of it all, I pretty much gave up and joined a company instead. But I'm a bit more determined this time.

    Surely though, this is something people do all the time. Is there some sort of cheatsheet or checklist of things I need to do?

    Any freelancers out there with some tips?


Comments

  • #2
    ChRoMe
    Registered Users Posts: 2,021 ✭✭✭ChRoMe


    Goodshape wrote: »
    Finishing up with my current employers at the moment and looking towards what to do next. Contracting / freelance seems a very attractive option to me for the next year or so, longer if it goes well.

    But, I've always been dreadful at the finance/management/compliance side of things. So much so, I'm not even sure what words to use to describe what I need :P

    Basically, I want to be autonomous, I want to make money, I want to pay whatever taxes or do whatever needs to be done to "stay legal" and avoid a call from revenue, or fines, or worse a year or so down the line.

    Last time I tried to do this seriously I basically got so annoyed with the complicated and seemingly inefficient bureaucracy of it all, I pretty much gave up and joined a company instead. But I'm a bit more determined this time.

    Surely though, this is something people do all the time. Is there some sort of cheatsheet or checklist of things I need to do?

    Any freelancers out there with some tips?

    I'm not sure about Ireland, but here in London there are lots of companies here that provide the required services to freelancers. They will organise your professional insurance, do all your books, generate invoices the lot. Some of them can provide you with a bank account which allows them to automatically do all of your returns without any action required on your part.

    tl;dr You will be making good money, outsource this task, all of it.


  • #3
    Goodshape
    Registered Users Posts: 8,488 ✭✭✭Goodshape


    That definitely sounds like a nice option. Obviously would need to weigh up the cost of that vs the hassle of doing some/all of it myself, but certainly sounds like what I'm after on the face of it.

    Anyone know of somewhere in Ireland providing that sort of service?


  • #4
    ChRoMe
    Registered Users Posts: 2,021 ✭✭✭ChRoMe


    Goodshape wrote: »
    That definitely sounds like a nice option. Obviously would need to weigh up the cost of that vs the hassle of doing some/all of it myself, but certainly sounds like what I'm after on the face of it.

    Anyone know of somewhere in Ireland providing that sort of service?

    The reduction in risk of becoming non compliant is worth it alone, never mind the hours you get back that otherwise would be doing a mind numbing task.


  • #5
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Search boards, and google.ie for umbrella company.

    Most/all will use one of their own Limited companies for the purpose. Some of them will give you the option of having your own Limited company while they handle the accounts/tax/returns etc etc etc.

    Either way the process is fairly similar, you invoice your client (or the umbrella company do on your behalf), you submit expense claims to the umbrella company. They do the jiggery pokery with taxes etc, you get paid.


  • #6
    Goodshape
    Registered Users Posts: 8,488 ✭✭✭Goodshape


    Graham wrote: »
    Search boards, and google.ie for umbrella company.

    Nice one, thanks! Had tried a few searches but didn't know what they were called. Getting somewhere now with 'umbrella company'.


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  • #7
    KonFusion
    Moderators, Education Moderators, Technology & Internet Moderators Posts: 2,588 Mod ✭✭✭✭KonFusion


    Goodshape wrote: »
    Anyone know of somewhere in Ireland providing that sort of service?

    BCK.ie do all my financials etc. Lovely folks and at a very reasonable rate. They'll advise you on everything you'll need.


  • #8
    srsly78
    Registered Users Posts: 7,157 ✭✭✭srsly78


    Just get yourself an accountant, they will give you proper advice on this. Annual charge to do books etc etc should not be more than e1000. Avoid umbrella companies, over time these end up costing you a lot more.

    The actual "setup" part can be done by a company formations agent (if you choose to go that route). Works out as a once-off fee of e200-e300.


  • #9
    John_Mc
    Registered Users Posts: 2,790 ✭✭✭John_Mc


    Dont bother with Umbrella companies, they usually take 10-15% which is ridiculous. My accountant got me up and running as a private limited company, then gave me two excel files and a bit of training on how to use them.

    After the first month it's all easy and not very difficult. Takes about 1-2 hours every month to get everything in order and I know exactly what's going on with the company.


  • #10
    Goodshape
    Registered Users Posts: 8,488 ✭✭✭Goodshape


    10 - 15% would be ridiculous. From looking around so far though, sounds like you might be able to get better than that.

    I'll talk to an accountant before making that decision anyway. Umbrella company sounds great to alleviate the worry and hassle, but we'll see. Maybe a good accountant can convince me it's not too much hassle.


  • #11
    Tar.Aldarion
    Moderators, Science, Health & Environment Moderators, Social & Fun Moderators, Society & Culture Moderators Posts: 60,082 Mod ✭✭✭✭Tar.Aldarion


    John_Mc wrote: »
    Dont bother with Umbrella companies, they usually take 10-15% which is ridiculous. My accountant got me up and running as a private limited company, then gave me two excel files and a bit of training on how to use them.

    After the first month it's all easy and not very difficult. Takes about 1-2 hours every month to get everything in order and I know exactly what's going on with the company.

    I'd certainly do that over spending a grand on it every year. I can't imagine it's that hard after the first time, or even the first time with basic training.


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  • #12
    srsly78
    Registered Users Posts: 7,157 ✭✭✭srsly78


    There are always questions to ask, so it's good to have the accountant on retainer. Even when you know what you are doing you still want someone to check the books etc. The official annual return is very different from the day to day book-keeping, it's full of legalese and jargon.

    A grand a year is what you pay for an accountant (annual return + vat + advice for ltd), that works out cheap. Umbrella companies and other methods end up costing e2000-e3000 per year, with lots of restrictions and possibly extra % to pay.

    Umbrella companies really really are pointless, they don't even save you work. You have to do up your expenses every month and mail them receipts etc. Pretty much exactly the same "record keeping" you have to do when you run it yourself!


  • #13
    John_Mc
    Registered Users Posts: 2,790 ✭✭✭John_Mc


    srsly78 wrote: »
    There are always questions to ask, so it's good to have the accountant on retainer. Even when you know what you are doing you still want someone to check the books etc. The official annual return is very different from the day to day book-keeping, it's full of legalese and jargon.

    A grand a year is what you pay for an accountant (annual return + vat + advice for ltd), that works out cheap. Umbrella companies and other methods end up costing e2000-e3000 per year, with lots of restrictions and possibly extra % to pay.

    Umbrella companies really really are pointless, they don't even save you work. You have to do up your expenses every month and mail them receipts etc. Pretty much exactly the same "record keeping" you have to do when you run it yourself!

    Completely agree with this. A good accountant will keep you on the straight and narrow whilst still helping you earn the most amount of money.

    The last thing you want is an Audit by Revenue who find you've been doing it completely wrong


  • #14
    km991148
    Registered Users Posts: 4,275 ✭✭✭km991148


    Go with an accountancy firm - most will be in the region of 1k - 1500 (Remember the company you set up pays this before you take your salary - so it is really only costing you 40-70 eur per month). Most accountants will have some form of simplified process (i.e. you submit a pre formatted spreadsheet each month).

    Also - going with an umbrella company means you are a director of a firm with several other people who you have never met - this has the potential to cause issues (although this would be rare).

    A company I have heard of is OSK - but there are plenty from individual private accountants to larger corporate firms.


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