Freelancing in the PR industry

 

• Introduction

Historically there have always been opportunities for freelancers in the PR sector, primarily because it offers agencies the flexibility to recruit specific skills for new business wins and client campaigns, which may last from just a week to a year or more. On the in-house side, freelancers offer vital maternity  and sick leave cover.

• Freelancing – a lifestyle choice

On the plus side there’s the flexibility to choose where and when you work, together with the increased variety of challenges from one assignment to the next – you’ll never feel pigeon-holed again!. On the downside, there’s the uncertainty – if you’re the sort of person who lies awake at night worrying where the next contract is going to come from then perhaps freelancing isn’t for you.

For those freelancers who can build up a good reputation and network of clients, freelancing offers the perfect antidote to the work-life balance conundrum.

• Freelancing – a question of finance

Often freelancers can achieve higher hourly rates than their permanent equivalents – this is compensation, if you like, for the uncertainty freelancing brings with it. Also, whilst permanently employed staff may enjoy a wider range of company benefits, such as pensions, holiday and sick pay, freelancers often have to provide for themselves. Then again, permanent staff can’t set genuine business expenses such as travel against tax. For an up-to-date guide to freelance rates across all sectors and levels within PR , please call Katrina Shead on 020 7292 0476.

• Freelancing - your tax status

Probably the biggest single headache when starting out is to determine your tax status i.e. do you choose self-employment or PAYE? If you’re likely to be picking up most of your work through recruiters like Median, working on longer terms contracts with hours and duties pretty much specified by your clients, usually at their own premises, then probably the inland revenue would class your tax status as PAYE. If, on the other hand, you’re going to be working with lots of different clients, frequently without a recruitment company as an intermediary, on shorter-term contracts in which you pretty much tell the client what needs doing, then you’re probably better off choosing self-employment, either in the form of a limited company or sole trader.

Median Recruitment will never offer specific tax advice - you should always use a reputable accountant for that - but the handy guide below lists the main pros and cons of PAYE against self-employment:

• Working as a Freelancer– you can form your own Personal Services Company (PSC) or use an Umbrella company – we will provide some options for you but will make no recommendations. As a PSC, you will agree a relevant payment scheme with an accountant and HMRC.  Umbrella companies act as a single limited company for a large number of freelancers who operate, notionally, within the PAYE regime.

  Running your own company will mean keeping highly accurate business records, including receipts and expenses, and presenting accurate accounts to the Inland Revenue which may at any point be challenged; particularly as a PSC and to some extent through Umbrella.  In all cases, limited company contractors receive no paid holiday and any employee benefits they require will be sourced and paid for by them.

  Any contract between the Contractor and Median Recruitment Ltd will directly reflect the contract and schedule of work between the Median and the End User. 

Up to date advice can be found at businesslink.gov.uk.

• PAYE - Identical to permanent employment in almost every way. Your income tax and NI is deducted at source, so every week or month you receive just your net pay. You receive all the benefits of a permanent employee including paid holidays (usually accrued at 1.66 days per month) statutory sick pay and statutory maternity pay. Plus there are no records to keep; all you do is supply your P45 at the start of every assignment.

 

Registering for self employment

1. Talk to a reputable accountant to check that your type of freelancing qualifies you for self employment.

2. With the help of an accountant decide whether your status will be sole trader or limited company.

3. If you choose sole trader  go to hmrc.gov.uk/selfemployed. Please note, due to tax liability legislation, under no circumstances can Median Recruitment place sole trader freelancers into our clients.

4. If you choose to form your own limited company, or more likely purchase one off the shelf, visit hmrc.gov.uk/selfemployed.

5. For recommended umbrella and composite limited companies, and all types of advice for contractors, go to the Professional Contractors Group at pcg.org.uk

6. You may need to register for VAT. Try direct.gov.uk/moneytaxandbenefits

7. Set up a good record keeping system.

 

• Freelancing - getting paid

Freelancing through an agency such as Median means you will probably be paid directly, either on a weekly or monthly basis, on presentation of a timesheet which must be signed by the client to confirm your hours. Please note you must get this in by 5pm on the Monday following the week you have just worked in order to guarantee being paid by the following Friday. PAYE freelancers will receive net pay with tax and NI deducted, and we will keep record of your paid holiday entitlement which you can check with us at any time.

Limited company freelancers will be paid gross, however a signed timesheet must be supplied along with an invoice from your limited company. Unless you request otherwise you will always be paid by BACS.

Setting up with Median

PAYE - we simply require your bank details in order to pay you, together with your P45 (or P46 if you don’t have one).

Limited Company -  we MUST have a copy of your certificate of incorporation before you begin working, in addition to your bank details.