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Why I am self employed

Self employment isn't about the money alone for me. It's about the freedom

I've been self employed since I left university in 2009 (with one blip working for TalkTalk for 18 months).

In the early days I did only project based work, mainly direct client work in the entertainment industry. The hours were irregular and I was fully responsible for every aspect of the project lifecycle. This suited me greatly because as a night owl I could work overnight and get things done whilst appearing to be super fast.

Unfortunately due to health issues and some lack of planning on the business side of things, that initial venture didn't succeed. It sucked but it's the way it is. Luckily I took a contract at TalkTalk and I enjoyed the project so much that I wanted to see it through till the end and I took a perm position there.

Working as an employee I felt a sense of community and I had direction. They had training plans and career development schemes. But, all of that just made me feel caged. The main part of the development for the project had come to an end and I decided to try being a full time contractor. Plus, the forced 7am wake up time was a killer for me.

Contracting is different to being a freelancer and it varies from place to place. A lot of companies use contractors as disguised employees, or permatractors. It's not uncommon for a contractor to be working at the same place for years on end and essentially fill in the same responsibility of a full time employee except that they are not eligible for sick pay, holiday pay or any company perks or bonuses. On the flip side they get paid significantly more and potentially pay less in direct taxation.

Permatractors are still usually under the supervision, direction and control of the company that is paying their invoices. That means that they control how their work is done, when it is done and what is done. This to me is not in any way what I define as self employment. 

Self employment, to me, is being fully responsible for the work that you have, being able to tackle it when you want (within agreed deadlines) and how you want (within agreed, but reasonable limitations). A contractor should be noticeably different to the employed staff in their working patterns and output. This in my experience is seldom the case and the government, in their traditionally cackhanded way are trying to deal with it with the further expansion of IR35.

In every contract I have ever worked I have strongly fought to ensure my independence and identity as a self employed resource and not an employee. But, sometimes it's difficult. 

IR35, for those who don't know give a new tax status to permatractors so they have to pay additional tax including increased income tax, employee national insurance and employer national insurance. All without any of the benefits that an employee receives. It's a bad deal for all those involved and it's short sighted of the government.

The changes that are due in April 2020 to the IR35 legislation will take the burden of deciding whether you are inside IR35 from the contractor to the client. I suspect clients will err on the side of caution and blanket decide that their permatractors and contractors alike are under IR35. 

Business Man Running Away From Tax
The tax man doesn't scare me!

These changes, for me, aren't a terrible thing. They are a kick in the right direction. It's time for me to focus on getting more good quality direct clients on project based work. It's difficult, and there are peaks and troughs with the cashflow. But in the end it's always worth it. The sense of pure ownership and achievement when a project goes well is hard to compare to that in employment. Coupled with the absolute freedom of dictating my own working hours, methodologies and choice of work it's the right decision for me. So IR35 does not scare me, not in the slightest.