The flexible working ‘movement’: where are we with it?

Today’s complex working landscape presents businesses with the challenge of meeting the demands of people with very different values, expectations and needs. Yet, they all seem to share a desire for flexible working.

It’s little wonder, then, that the flexible working movement has gained such momentum in the last decade. Employers have recognised that the traditional workplace is no longer fit for purpose. But we’re yet to reach a point where flexible working is ‘the norm’, even four years on from the introduction of laws by the UK government which gave everyone the legal right to request flexible working.

 

To use the ‘right to request’ or not

People are still unsure whether or not to use their right to request flexible working, for fear it could be perceived as a sign that they are less than dedicated to their job. In a study conducted by social media training experts Digital Mums last year, more than half (51%) of UK employees believed that asking for flexible working hours would be viewed negatively by their employer and a further 42% thought it would have a negative impact on their career.

Millennials, who are one of the key drivers of the movement, were particularly wary of not wanting to upset their employer, with two-fifths (40%) saying they’d be too nervous or worried to ask for flexible working hours, despite eight in ten (77%) wanting this way of working.

Those fears might very well be legitimate. According to a new joint report from flexible working experts Timewise and consultants Deloitte, more than 30% of workers who opt for flexible hours feel they have less status and importance as a result. A quarter of the 2,000 people surveyed also thought they had missed professional opportunities because of this.

For freelancers and contractors, there aren’t the same lingering fears, although they might have some concerns about whether working remotely could impact on the relationship with the client, if there is an expectation to be on site every day.

 

Remove the need to request

As we revealed in our previous blog on the pros and cons of flexible working, however, any concerns employers might have about what flexible working could do for business are often shown to be ill-founded.

Ask anybody who works flexibly whether they work harder and more productively now than they did when they were in a more structured setting and the answer would be unequivocally ‘yes’. Flexible workers often say they feel like they owe it to their company to go beyond the call of duty every day. While that brings up another issue entirely around work/life balance – another main driver of the movement – it goes to show how much staff value flexible working.

In a recent piece of research by SmallBusinessPrices.co.uk, more than a quarter (28%) of respondents said they value additional holiday days, sabbaticals and flexible working hours as employee benefits, over receiving a pay rise.

By promoting flexible working – rather than making employees request it – employers could find themselves with a line of new talent at the door, while holding onto the existing talent they already have in the building.

It could even help end gender discrimination in the workplace. According to the Timewise/Deloitte report, one of the biggest barriers to gender equality and pay parity is employers’ continued refusal to accept non-traditional working practices.

Timewise chief executive Karen Mattison stresses that the family structure in which one person stayed at home and another went out to work is “no longer the case for the majority of UK households” and employers need to react by changing their flexible working practices.

With the technology available today to facilitate flexible working, it’s never been a better time for individuals to dictate how long, where and when they work. More and more people are taking the plunge and ‘going it alone’ as either a contractor or a freelancer.

Of course, with Intouch Accounting by your side, you’re never alone. We are here to support you by answering any questions you may have, from assessing whether it’s the right time for you to contract or freelance, to helping you set up a Limited Company.

 

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

How to set up a new company

While setting up a Limited Company tends to involve more costs and admin than operating as a Sole Trader or under an Umbrella agreement, it also offers a wealth of benefits. Among them are greater tax efficiency, less personal liability and more control over your contracting business and personal finances.

If you’re certain that your skills are in demand and are confident that you can charge your desired day rate for your services, here’s what you need to do to set up your new business:

 

Choose a company name

Here’s the fun part – what do you want to call your company? This is completely down to personal preference; would you rather an abstract name, or an informative one that lets prospects know exactly what you do? Our top tips would be to research online for inspiration, brainstorm ideas and test a few of your favourites on friends and family. Before you get your heart set on anything, check with Companies House that your preferred name is available.

 

Incorporate your company

If you’re going it alone, you’ll be responsible for ‘incorporating’ your company, which essentially means registering with Companies House. Along with your company’s name and address, you’ll need:

  • Details of the appointed directors, who’ll control the business (this is likely to be you but may also include a partner/spouse).
  • Details of the company’s shares – for instance, you may have decided on shared ownership with a partner/spouse. If so, they’ll need to agree to forming the company and the written rules, called the ‘memorandum and articles of association.’
  • To check what your SIC code is, which identifies the nature of your business.
  • To establish a company bank account, register for VAT and set up a payroll scheme.

 

Pulling together all the required information can be slightly daunting; also, how you set up your company can affect how tax efficient you are further down the line. This is why you should consider seeking advice from a professional at Intouch, who will also help to ensure that you’re clued up about IR35 tax legislation. Do this and you’ll also have much more time available to channel into the next, important task…

 

Getting your name out there

With your company created, it’s time to shout about it from the rooftops and get your name out there. Take time to research different marketing and promotional tactics; how are you going to show prospects what you have to offer and encourage them to choose YOU to satisfy their next contract?

 

At Intouch Accounting our Personal Accountants get your new company all set up for free, and work with you to help you make the right business decisions and work in the most tax efficient way. We know that taking the first steps into contracting is a big decision, so we’re happy to chat through your questions even if you’re not ready to get going just yet. Get in touch with one of our expert team members today to find out more.

 

Related reads:

Venturing into contracting? Download our free guide now

Calculate your take-home pay and find out if Limited is right for you

Contractor Accountants – do you get what you pay for?

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

 

The New Tax-Free Childcare Scheme

The New Tax-Free Childcare Scheme – how will it help contractors?

 

The recent Budget revealed more details about the new Tax-Free Childcare scheme, but what does this mean for contractors? Well the good news is, unless you want to, you’ll no longer have to mess around with childcare vouchers or setting up an Employer’s Scheme when you might be the only employee! And, perhaps most importantly, you will get more through the new Scheme.

 

The changes are a little way away yet and if you’re already an Intouch client, your Personal Accountant will be able to offer you advice and guidance nearer the time of the scheme being rolled out.

 

In this blog we address the top 12 questions contractors and freelancers will want answers to now.

 

1. When does it launch?

The scheme will start being rolled out from early 2017, firstly to those parents with youngest children.

You will be able to open an account online, which you can pay into for the cost of your childcare with your chosen registered provider. As soon as your youngest child becomes eligible you will be able to apply for any other children you may have.

 

2. How will the government support it?

For every 80p you pay in, the government will add 20p. They will top up the account with 20% of childcare costs up total of £10,000. That’s the equivalent of up to £2,000 per child, or £4,000 per child with a disability.

 

3. What’s the cut-off age?

Children up to the age of 12 and children with a disability up to the age of 17.

 

4. Who is it available to?

Parents who work and where individual earnings equal approximately £115 per week and not more than £100,000 per year.

 

5. What about your employer?

Unlike the current Employer-Supported Childcare scheme, you don’t need to rely on your employer to offer the new scheme to you. Any family that qualifies (see question 4) can apply. So if you run your own Limited Company you won’t have to go through the additional administration of setting up an employer-run scheme when you might be the only employee.

 

6. What about self-employed parents?

Freelancers are not being left out. Self-employed parents can get support through the new Tax-Free Childcare scheme.

A ‘start-up’ period will be introduced by the government, to ensure that those parents who are self-employed won’t have to reach the minimum weekly earnings threshold of £115. If parents are on paid or unpaid paternity/ maternity leave, paid sick leave, or adoption leave then they too will be eligible.

 

7. What’s happening to the Employer-Supported Childcare scheme?

Employer-Supported Childcare (childcare vouchers) will continue to run but won’t be available to new entrants from April 2018. If you’re planning on using it past this date, then you can continue to do so for as long as your employer offers it.

You don’t have to move across to Tax-Free Childcare, although the government predicts that it will be open to more than twice the number of parents as Employer-Supported Childcare.

 

8. Can other people pay into your childcare account?

Yes! If you have generous family members or friends then they can contribute.

 

9. What about the free childcare entitlement?

The new Tax-Free Childcare scheme will run alongside the 50% increase to free childcare (to 30 hours per week) for working families with three and four year olds from September 2017.

 

10. Will it be complicated to use?

The government intend to make the process as simple as possible. You will have to reconfirm your circumstances every three months.

 

11. What if you don’t use the money you put into your account?

If you decide to stop using the scheme, or if your circumstances change, you can withdraw the money from your account whenever you wish. You will, however, lose the money the government has contributed towards your payments.

 

12. Which scheme is best for you?

This all depends on your circumstances, but here’s a quick overview:

Tax-Free Childcare – who wins?

  •  Self-employed people or couples earning less than £100,000 each. They are eligible for this scheme but can’t get childcare vouchers
  • Parents who have more than one child and whose childcare costs are high. Under this scheme help increases with the number of children, unlike vouchers which are limited regardless of the number of children.

 

Childcare vouchers – who wins?

  • For those earning between £100,000 and £150,000 the vouchers are the better option.
  • Couples where one parent doesn’t work – although they are not eligible for Tax-Free Childcare, the employed parent is eligible for vouchers.
  • Basic rate taxpayers who pay less than £9,336 in childcare costs. Below this threshold the amount you save with vouchers exceeds the amount you can save with Tax-Free Childcare.
  • Higher rate taxpayers who pay less than £6,252 in childcare costs. Below this threshold the amount you save with vouchers exceeds the amount you can save with Tax-Free Childcare.
  • Additional-rate taxpayers – anyone earning £150,000 or more isn’t eligible for the scheme but additional-rate taxpayers can claim vouchers.

 

Find out more about childcare vouchers.

 

So what’s next?

More information will be made available ahead of the scheme’s launch and Intouch Accounting will be first to announce any developments, so keep a close eye on our blog section for the latest updates.

 

We know how important preparation is when you’re contracting whilst looking after a family, that’s why we’re here to inform and aid you in any way we can. Got questions about the new scheme? Simply leave us a comment and we will get back to you.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.