Tax savings are great: but what is your time worth?
As an accountancy firm with specialist expertise in looking after the needs of contractors and freelancers, we often talk about saving them tax. IR35 and the pitfalls, dangers and complications surrounding that classification is also a common theme; but there are other things which have significant implications for contractors too…
Your time is more valuable than you think!
Before you read on particularly if you are a contractor or are considering going freelance, I want you to quickly work something out for me. So grab your smartphone, swipe across to the calculator and do this (don’t worry its quite simple):
Divide your average monthly take home amount by the number of ‘chargeable’ hours you work each month. It is important to only count ‘chargeable’ hours because those are the hours that earn you your money. Do not include travel, administration, lunch, conversations, downtime or looking for work. So for example that might be 5 hours per day for an average of 20 days per month (that’s 100 in total). Now you have an idea of your actual value per hour, as a business. Good, let’s move on…
Your time is far more valuable than you previously thought. Every minute that you are not earning you are wasting an opportunity. Now, I’m not saying that you shouldn’t have downtime, free time or time to manage your business: after all the reason many of us went into business for ourselves was to seek out the mythical work/life balance. But you should at least be in control of your valuable time and use it in a way which best meets your goals.
Here’s something you might not expect me to say.
Saving tax is not all that important! Last year we saved our contractor clients hundreds of thousands of pounds in tax: but that was by no means our biggest achievement. I have to be honest and admit that I haven’t found a way of measuring this value (yet) but the number of hours we saved them must be even more significant. And the number of ‘clear-minded’ hours where they could focus on their business without giving a moment’s concern about their finances (safe in the knowledge that we have their back) probably dwarfs that number again.
FreeAgent is a time-enhancing business dynamo.
One of the key developments in recent years and one that has significantly improved the time-enhancing value that we give back to our clients is FreeAgent. Its whole focus is on creating efficiencies for contractors and delivering real-time actions, reports and early warnings about their various financial obligations and needs. We work with FreeAgent to generate the right information for each freelancer, meaning they don’t have to worry, work out or even think about their bills and cash flow. We also reduce their financial administration time to virtually zero using FreeAgent’s bespoke designed features. FreeAgent will give you back genuine worry-free time.
The cost of FreeAgent if you were to buy it yourself is around £30 per month: I would hazard a guess that is far less than the hourly rate you worked out earlier! But it gets even better than that, because as a Meades Contractors client you get all of its benefits for free. Plus, we will look after everything else for you.