Sole trader vs limited company or umbrella – what’s best? IR35 changes; Parliamentary debate on the future of work; Seth Godin on creative practice.
I had to set up a limited company last year for a new contract role via an agency. My tax status only came up after I’d done the interview, a written test, and been offered the role. My agent said, “oh, we don’t work with sole traders.”
It was a chunky project – a six-month contract to write a book for a big brand and they were happy to pay my day rate, so I went for it. I set up a limited company via Companies House – fast, no-nonsense, and costs £12. I had to sort out business insurance (took much longer), an accountant, and a business bank account with a UK address for IBAN (EUR) payments.
A bit of hassle for one contract but that was the deal. And I wanted the job, so I did it but not happily. I’ve been a sole trader since I started freelancing back in 2002 and was gifted a limited company once (we broke up, I wasn’t ready; I have commitment issues). I don’t think individuals should operate as companies unless you’re employing someone. Nor should agencies and companies dictate your set up. These roles are often last-minute so you’re under pressure to act quickly or someone else will get the gig.
Anyway, the project went well – a good challenge and I learned a lot. Great to work with a team and have a physical product at the end of it. The contract was due to be extended in February to finish the editing, but this fell through with lockdown. Things have been pretty quiet on the contracting front since. Companies have cut budgets this year, which tends to hit freelancers first, and bigger clients are preparing for IR35 changes next April which will bring private companies into line with the public sector. Many have now banned the use of limited company contractors which is the way most contractors have operated up to now. See more.