How to avoid January self-assessment stress

31st January

January is well and truly upon us. Most of us have completed our first full week back in work and the challenges of the New Year are facing us.

January holds more significance for freelancers than most, and that’s thanks to the 31st January self-assessment online submission deadline looming large on the horizon. The first month of the year can be stressful for freelance contractors and the self-employed as you rush to collect everything your need to avoid being lumped with a hefty fine if you miss that all important deadline.

If you’re new to the process, or you’re struggling a bit in the organisation department, then read on for some of our top tips to avoid self-assessment stress this month.

Ensure you’re registered

If you’ve just gone freelance then this is an essential step. You only have to register with HMRC once to let them know you need to file a self-assessment. From then you will be reminded by HMRC every year that you need to complete your assessment.

First time registration deadlines are October 5th of the current tax year. Failure to register will incur further fines. However, if you manage to submit your self-assessment in full by the 31st January then you can reduce or even avoid late registration fees.

To successfully register you need to provide your National Insurance number and the details of your company or relevant personal details. When you’ve registered your will receive a Unique Taxpayer Reference number. This is an important piece of information so keep it safe as you will have to use this number on all subsequent self-assessments.

Keep a paper trail

There is nothing worse than the January rush, scrabbling to pull together records and evidence of your finances. It is at this point in the year that it pays to be fastidious and diligent all year round by keeping a water tight record of your incoming and outgoing expenses.

Getting into the practice of collecting business receipts and keeping a log of the relevant business transactions that accompany them is wise. It will prove to be the perfect antidote to the January rush and will make filling out your online self-assessment that little bit easier.

In terms of the type of thing you need to be keeping hold of for your records come this time of year, there really is no limit on what is important and pertinent. One missing statement can cause delays in submitting your self-assessment so it pays to be cautious. You can find a comprehensive guide to keeping documents for tax purposes on HMRC’s website here.

Don't Forget

Don’t leave it too late

This would be a good time to note that leaving your self-assessment too late is likely to cause you unnecessary delays and unwanted fines. Of course, the key to avoiding the hurry is in staying organised and planning well.

If you’re not so hot on forward planning then it’s at this point we should probably mention late penalties. If you miss the 31st January deadline then you’ll be presented with an immediate £100 fine. Not a great start to the year. Further to that, if you leave it another 90 days then you’ll start to accrue a £10 a day penalty on top of the £100 fine. So start early to avoid being cleaned out thanks to late submission!

Don’t be afraid to ask for help

If you want to avoid the flop sweat developing at 11:55pm on 31st January while you curse your lack of book-keeping skills, then it does pay to acquire the help of an accountant. Tax is, by its very nature, a complex beast and any good business person knows how to delegate. If you can keep on top of your records then a recommended accountant should be able to help you when it comes to completing your self-assessment.

There’s plenty to get your teeth into as a freelancer. From chasing clients to drumming up new business and getting your name recognised, there’s always a lot to think about. However, keeping on top of your financial records and making sure you’re fully registered with HMRC is one of the most important things you can do if you want to avoid the pitfalls of a stressed and rushed January.

What methods do you use to avoid the typical January rush to submit your self-assessment return? Are you super organised and early to the self-assessment party or do you take advantage of a good accountant to remove the pressure a bit? Let us know in the comments how you’ll be handling self-assessment stress this year!

New Year’s Resolutions for Freelancers and Contractors

Happy New Year 2015

The presents are unwrapped, the turkey has been feasted upon and Quality Street wrappers are strewn about the house. The big day is over and so we turn our attention to the impending New Year.

It’s a time for looking back at the year just gone and to determine the changes we want to make for the year ahead.  If you’re a contractor then the end of the year is about looking at more than losing a few pounds in weight or getting more organised. It provides an opportunity to look at your business, your goals and the satisfaction and success you get from your career.

As it’s that time of year, we’re having a look at some of the most important New Year resolutions that a contractor can make to take their business to the next level.

Get ready for the self-assessment deadline

It’s the same every year. 31st January comes around and there’s a flurry of activity in the preceding weeks to make sure that your forms are filled in and any tax owed from the previous year is paid in full.

We understand that Christmas is a busy time of year for everyone. However, preparing yourself for January’s self-assessment deadline is one of the greatest pieces of advice we could give to any independent professional. The earlier you gather all of the required information, from earnings and expenses to personal assets and pensions, then the smoother the journey to the deadline. There’s no better way to start the New Year than by being prepared and organised.

Get comfortable with networking

One of the greatest things you can do as a contractor is expanding your business network. It can be a solitary lifestyle, especially if you don’t employ anyone else to help you. Engaging with other professionals in the same field has numerous benefits; it can lead to collaborative projects, potential leads, referrals and access to new resources.

It’s worth leveraging your social media accounts for business purposes; LinkedIn is brilliant for professional networking, while Twitter is perfect for starting conversations with individuals with similar interests. And never forget the importance of face-to-face networking. Find an event for local business people and enhance your professional network.

Work Life Balance

Find some balance

We’ve written before about the importance of learning to balance your work life and personal life to help avoid the common stress pitfalls. One of the greatest resolutions you’ll ever make, New Year or otherwise, is to redress a work life balance that is, well, out of balance.

Making more time for relaxing, hobbies and quality time with your loved ones will help you to manage your stress levels and will also leave you refreshed and better able to tackle any issues during the working day.

One issue we can resolve for you is access to comprehensive contractor insurance while you’re busy growing your business. Here at Kingsbridge we’ve created a unique contractor insurance policy that contains five key elements of cover, including Public Liability, Professional Indemnity and Employers’ Liability cover.

If you want access to one of the most wide-ranging, single policy contractor insurance packages then apply online now to purchase cover immediately. If you wish to speak with one of our highly trained team to further discuss your requirements then do not hesitate to call us on 01242 362149 where one of our customer advisers will be on hand to help.

A brief history of IR35

Rules Regulations

We’ve written about IR35 before; the tax and National Insurance legislation that affects freelance contractors operating as limited companies. Aimed at uncovering what HMRC terms ‘disguised employment’, it is the legislation on everybody’s lips.

But when and where did IR35 originate and why is it becoming such a key piece of legislation? We’re taking a look back to find out when IR35 entered the political agenda and how it has evolved to become the legislation we know today.

1999

1999. It was the year Prince sung about and Gordon Brown was Chancellor of the Exchequer. As part of the year’s budget, he announced the introduction of measures to crack down on those avoiding tax by working through limited companies while still working in a similar arrangement to a traditional employee.

2000

IR35 became law in April 2000, as part of The Finance Act. The legislation didn’t come in to force until the beginning of the financial year, but the act was backdated. This made its official commencement date 6th April 2000.

Officially known as Intermediaries Legislation, the new regulation came to be commonly known as IR35.

Opposition increases

Since the passing of IR35 into law, the legislation has been hotly debated, garnering much attention and opposition. Several bodies have been particularly vocal in their criticism, including the Professional Contractor Group, a representative organisation for freelance contractors.

Many felt that the legislation was too complex to be applied to a large variety of cases, harmed small companies that weren’t set up for the purpose of avoiding tax and actually enforced higher levels of tax on those found to be within IR35, as they are also liable for Employers National Insurance contributions.

Tax simplification and the coalition government

The Cameron Ministry saw a new Chancellor at number 11 in the shape of George Osborne in May 2010. One of his initial acts as Chancellor of the Exchequer was the creation of the Office for Tax Simplification.

One of the key objectives of the newly formed task force was to put IR35 under review and suggest to Osborne if the legislation should be drastically changed or scrapped altogether. IR35 was deemed far too important to do away with altogether and so a re-vamped version was developed.

The main changes to the law included publishing clear guidelines for freelance contractors, creating a dedicated helpline run by IR35 experts and the creation of a series of business entity tests, designed to provide contractors with an idea of the risks posed should they be selected for an IR35 investigation.

IR35 today

Since the OTS investigation, HMRC have promised to increase the number of IR35 investigations per year while reducing investigation time. There is now a whole industry of professionals that offer IR35 review services to assist freelance contractors in assessing their IR35 position.

The decision to keep IR35 and to enforce it more strongly has had an enormous impact on freelance contractors across the UK. There is no doubt that the legislation is controversial and highly contested and is likely to remain so.

Has your business been effected by the introduction of IR35? Have you invested in having your contract independently assessed by an IR35 expert? Tell us about your experiences in the comments below!

Contract Tax

Having Professional Indemnity (PI) insurance can improve your IR35 profile. It is an all-important element of cover for businesses, protecting against claims of professional negligence.

Here at KPSol we have designed our core insurance package to cover the most common risks faced by freelance contractors. This includes Professional Indemnity, Public Liability and Employers Liability cover.

If you have any questions or need to discuss your requirements then simply call our friendly, professional team on 0124 236 2149 and we will be happy to discuss your needs with you. Or you can apply online to get instant cover.

Five ways to kick freelancing stress to the curb

Pencil

We’ve spent the last few weeks exploring what it means to be a freelancer on our blog. We’ve looked at tax and finance, home office space, networking and legislation. That’s just the tip of the iceberg.

There are a lot of practical things that you have to consider when you embark on a career as a freelancer. One thing that is often ignored which plays an equally important role in your success as an independent professional is the effective management of stress.

Tight deadlines, maintaining a steady stream of business and overwork all contribute to increased stress levels. Chronic stress can affect your health, well-being and sense of job satisfaction. While a fast-paced lifestyle can focus you and encourage you to work more efficiently, it is always a good idea to actively manage your stress-levels.

Read on to find out some of top methods of busting stress, both in and out of work.

1.       Keep regular office hours

The temptation with freelancing is to work whenever and wherever you want. This can be a bonus when working on a larger project with strict deadlines. However, this should not become the norm for you. It can quickly develop into working anytime something pops up in your inbox. That’s a fast way to burnout. Make sure you have regular working hours and stick to them!

2.       Socialise

You have to get used to alone time when you work as a freelancer. It’s your business; you generate your own leads and you are responsible for completing the services you are contracted for. However, a growing sense of isolation due to your job can bring about enormous social stress.

So while there may be times when you want to hide away and work until the wee hours, try making plans with friends or organising a day out to take you out of your work environment completely.

3.       Take care of your health

Taking time off sick impacts any business, but working when you’re not in the best of health has long term effects that negatively impact both your health and your productivity. Avoid this by ensuring you prioritise your health to avoid getting sick in the first place. Eating well is the best place to start. And if you do get ill? Take the day off! The world and your business won’t come crashing down if you take a day to take care of yourself.

4.       Stay active

Exercise is a brilliant stress buster. It releases endorphins and makes you feel good naturally. Complete with improving your overall health, regular exercise is sure to give you boundless energy and will help you work out any work day frustrations. A 30 minute walk is the perfect place to start if you’re gym-phobic!

5.       Invest in your hobbies

Hobbies aren’t just the privilege of children or the retired. Hobbies can, in fact, prove to be a brilliant way to keep your mind active in your time away from work. If your preferred hobby includes a social circle, sports such as golfing or playing with a local football team will provide you with a community outside of work with which you can engage.

While the causes of stress when you work as a freelancer may never totally disappear, the way you deal with them is directly in your hands. Make sure stress doesn’t slow you down and leave you burnt out and overworked by following these steps, and creating a healthy work-life balance.

Freelancer Stress

What are some of your favourite ways to relax, unwind and tackle work stress? Let us know in the comments below.

And remember – you still have time to enter our National Freelancers Day competition!

If you want to be in with a chance of winning a brand new iPad mini 2 all you have to do is Tweet us directly at @KingsbridgeProf and finish this sentence, “I love freelancing because…” and use the hashtag #NFD2014.

The competition closes at midnight tonight, so you have all day to get your best answers in to us.  You’ve got to be in it to win it so if you fancy your chances get thinking, get creative and send us your best efforts!

Tax and the modern freelancer

Tax Return

You’ve established yourself as a freelance contractor; you’ve networked, you’ve set up your home office, and you’ve completed your first contract with a new client. Now it’s time for the best bit – receiving your first cheque.

Don’t get too attached to that number, though. You need to make sure you factor in the tax you owe, now that your tax isn’t being collected on a pay-as-you-earn basis. When you’re starting out as a freelancer, it’s really important that you get your head around the realities of your tax situation in order to ensure that you don’t incur the penalties associated with paying the wrong amount of tax.

Read on to find out the kind of things that are worth considering when it comes to tax and the modern freelancer.

Consider: Registering with HMRC

Anyone who sets up as a freelancer or as self-employed has to register for business tax with HMRC. This will allow you to provide your business information and set up records for self-assessment and National Insurance on behalf of your business. Failure to do this will result in financial penalties.

You also need to arrange to pay Class 2 National Insurance contributions as soon as you start freelance work. If your profits rise above £7,956 you will be required to pay Class 4 National Insurance contributions.

Consider: Your business situation

Are you a sole trader? Are you registered as a Limited Company? Or are you self-employed? Each status has an impact on the way you pay tax and how much. For example, if you are registered as a limited company, a preference for freelancers, then you will be subject to Corporation Tax and will have to provide a Company Tax Return at the end of your company’s accounting period. If you are self-employed or a sole trader then you must fill out self-assessment tax returns and submit them by 31st October and ensure you pay any tax you owe by the annual tax deadline of 31st January.

Consider: Keeping financial records

It’s vital that you keep detailed records of your financial activity as a freelancer. It’s good practice in general but it is essential for tax purposes. There are no hard and fast rules on the format in which your records can be kept – you can do it either on paper or electronically. If you’re not naturally organised, then it’ll pay to become so because maintaining records is one of the most important things you can do.

The types of details you need to record include profit and loss information, bank statements, orders, expenses and relevant communication. The list is extensive so start as you mean to go on and keep a record of all of your business’ incomings and outgoings to help stay on top of your tax obligations.

Consider: Working with an accountant

Some of us are more comfortable with numbers than others, which is why hiring an accountant to help you with your tax obligation is a personal choice. If you’re not comfortable with the numerous regulations of freelancer tax then working with an accountant could help translate some of the more obscure rules into a language you understand and help to save you money. If you do choose to appoint an accountant, try to source recommendations from fellow freelancers.

Tax can be a daunting subject to broach when you are starting out as a freelancer, but burying your head in the sand is never a good option. Stay organised, keep on top of your records and if you’re unsure about anything, ask the people in the know!

Do you have any tips on keeping abreast of your tax situation? Let us know in the comments below.

Money

Wednesday 19th November sees the sixth annual National Freelancers Day; a day designed to put freelancing in the spotlight and to discuss the significant contribution independent professionals make toward the UK economy.

To celebrate a day just for freelancers, Kingsbridge are running a special competition on Twitter to show some love to freelancers across the UK.

Entering our competition is simple. All you need to do is Tweet us directly at @KingsbridgeProf and finish this sentence, ‘I love freelancing because…’ using the hashtag #NFD2014.

From the best answers we’ll pick five runners up, who’ll each win £20 in Amazon vouchers, and the winner will be the proud recipient of a brand new iPad mini 2.

Winners will be announced on Twitter on Friday 21st November. So get thinking, get creative and send us your best efforts to be in with a chance of winning!

A contractor’s guide to IR35 legislation

HMRC Building

The Intermediaries Legislation, or IR35 as it is more commonly known, has been the topic of conversation for many in the world of freelance contracting. With HMRC this year promising to reduce IR35 case investigation time, this key piece of legislation is now a topic that no contractor can afford to ignore.

What is it?

IR35 is a key piece of tax and National Insurance legislation that directly affects freelance contractors operating through a limited company. The aim of the legislation is to uncover what is known as ‘disguised employment.’

The legislation requires HMRC to create a ‘hypothetical contract’ between the end client and the individual undertaking the work by ‘removing’ the intermediaries of which the intermediary referenced in the legislation is the contractor’s limited company (often referred to as a ‘personal service company’ or PSC).

The reason the contract is hypothetical is that there are no contractual terms between the end client and the ‘worker’. The contractual chain is often End Client → Agency → PSC → Worker, but IR35 applies equally where there is no agency in the contractual chain because the PSC is the key intermediary.

The End Client and Agency are both engaging limited companies as it isn’t possible to ‘employ’ a limited company, and as such are off the hook as far as IR35 is concerned. The focus therefore falls upon the PSC which, in essence, will have failed to operate Pay As You Earn on its employee in respect of an engagement where HMRC can argue that IR35 applies. HMRC, in this situation, would be able to successfully argue that the hypothetical contract represents a contract of service (i.e. one that resembles an employment relationship).

What does this mean for the contractor?

When a contractor is trading through a limited company, the contractor can organise their remuneration in such a way that they receive a small salary and high dividends. The contractor therefore benefits from a slightly lower tax rate on the dividends, but the real saving comes from the fact that dividends do not attract employer or employee National Insurance Contributions (NIC). However, they should only do this for engagements that are deemed to be ‘outside of’ or ‘not caught by’ IR35.

IR35

Why is it important?

As a contractor, if your engagements are caught by IR35 legislation as being ‘disguised employment’, then your company becomes liable for the tax and NIC that would be due plus interest on the amount and even a penalty if HMRC can argue that you have not undertaken any form of due diligence. This obviously places a huge financial burden on a contractor, the effects of which could last for years.

How is IR35 applied?

When considering any kind of employment status issue, the first question asked will always be: “Is there a contract of employment?” The reason is that there is no legal definition of a “contract for services” (self employment), but there is sufficient case law to be able to determine what constitutes a contract of employment. Logically, if there is not a contract of service, then there must be a business to business relationship.

There are three key tests of employment which are used to investigate individual engagements, and these help to determine whether or not a contractor’s engagement falls within or outside of IR35 legislation.

The wording of your contract is key here. A genuine freelance contract will be a contract ‘for services’, whereas an employee contract will be a contract ‘of services’. This distinction is hugely important in proving that you are in fact a genuine business, providing a service to another business. In this instance, it pays to be diligent and have an independent IR35 specialist assess your contract.

Another test used to establish if a contract is IR35 friendly is the issue of control. A genuine contractor should have full autonomy over how the work they are contracted for is completed. There are also subsidiary elements to control that can be considered. It is sometimes the case that the contractor will have a considerable input into what the engagement will be (although that is usually the client’s decision), but often the contractor can determine the location. Perhaps the client has multiple sites and the contractor will determine from where he/she operates, or the contractor can work from their own offices. If a contractor has control over where the work is undertaken, they are also likely to have control over when it is undertaken.

Nevertheless, just because the client has determined the project and requires that the engagement must be undertaken on their site (whether due to security reasons or because that is where the equipment/people are), and that the site can only be accessed during certain times, this does not mean that the client is exercising control. The key issue is whether the contractor has control over how the work is undertaken.

There are two further important areas that are considered when assessing the IR35 status of engagement. The first is a right of substitution clause. If a contractor has a clause written in to their contract that a similarly skilled worker can replace them on a contract, the contractor is not obliged to provide their personal service. Having to provide one’s personal service is a key indicator of an employment relationship; having the right to substitute denies personal service and therefore indicates a self employment relationship.

The second is what is known as Mutuality of Obligation (MoO). An employee in a typical employer-employee contract will be paid each month and, in return, will be expected to work across a range of tasks at the discretion of their employer.  An arrangement such as this does not exist for limited company contractors engaged in a contract for services. Instead, a contractor will be engaged for a limited and specific project and when that contract comes to an end they are not obliged to remain working for their client. Indeed, if mutuality is to be fully denied, there should be no expectation that the contractor will work for the client on any given day or even be obliged to see an engagement through to conclusion.

Of course, IR35 investigations vary on a case by case basis and no preventative measures will ever cover every eventuality. However, it remains advantageous for all contractors to take the threat posed by IR35 seriously and remain prudent in ensuring that they can confidently prove that they are in business on their own account.

Having Professional Indemnity (PI) insurance can significantly improve your IR35 profile. PI insurance is an all-important element of cover for businesses as it protects against any claims of professional negligence.

Make sure that you are ticking an important business entity test off your list by ensuring that you are fully covered as a freelance contractor. At KPSol we have designed our core insurance package to cover the risks inherent in freelance contracting. This includes Professional Indemnity, Public Liability and Employers Liability cover; our product can help you avoid getting caught out by IR35.

If you wish to discuss your cover requirements then simply call our friendly, professional team at KPSol on 0124 236 2149 and we will be happy to discuss your needs with you. Alternatively, apply online to get cover instantly.

Five Of The Best LinkedIn Groups For Engineering Contractors

LinkedIn is an indispensable tool for any professional, giving you the ability to introduce your CV and career goals to the world of social media. This is especially true for freelance engineers, as LinkedIn can provide a space in the vast world of social media for a contractor to advertise their skills when looking for freelance opportunities.

However, the importance of LinkedIn has come to be about far more than having just a personal page. Focusing on the networking aspect of this professional social media platform is how you can use LinkedIn to stand out. Participation in LinkedIn groups is the perfect way for freelance engineers to showcase their skill set, participate in industry discussions and catch the attention of potential recruiters.

In view of this, we’ve collected a list of the best LinkedIn groups for engineers to join, to give you a headstart on the path to becoming a savvy LinkedIn user and learning how to leverage its inherent opportunities.

1.       Oil & Gas People

With over 300,000 members, this international group is set up for anyone working in the oil and gas industry. Featuring discussions on the latest news and trends in the industry as well as highlighted job opportunities, this LinkedIn group is a great resource for any contractor working in the oil and gas industry.

2.       Freelance Engineers UK

A great general group for freelance engineers in almost any discipline, including civil, structural, marine or geotechnical, this group provides a place for freelancers to find job opportunities and to discuss issues affecting freelancers such as interview tips and expenses.

3.       Engineering Jobs Worldwide

With close to 400,000 members, this is the LinkedIn group for nearly any engineer looking for jobs on an international scale. From mechanical, electronic and chemical to marine, environmental and civil anyone in the world of engineering would benefit from investigating the opportunities present in this group.

4.       Network Engineer Professionals

This group is one for all of the IT professionals. Whether you’re a professional network engineer or work in IT support this is the group for you. Very active and with over 48,000 members this is a great source of information for fellow IT and communication engineer professionals.

5.       The UK Construction & Civil Engineering Group

Designed as a forum in which civil engineering professionals can discuss the latest advancements and changes to the industry, this group features discussions on best practice, invitations to bid on upcoming projects and international industry news.

Have you used LinkedIn, or other social media platforms, to any great success in securing freelance job opportunities, or connecting with other professionals? Let us know in the comments below.

Ensure you’re not worrying about your freelance contractor insurance while networking like a social media superstar with KPSol’s core insurance product. Designed specifically for freelance contractors in mind, the combined policy features five areas of cover, including Professional Indemnity, Public Liability and Employers’ Liability cover, all for one competitive price.

If you choose KPSol as your insurance broker you will benefit from an A-rated insurer, a combined policy with few exclusions and instant access to your documents. If you’re interested in getting a quote then apply online now or call our friendly, UK based team to further discuss your requirements on 0124 362 149.

Fracking Opponents – Justified or Misinformed?

David Cameron has recently announced his support of Fracking in the UK, yet there are still many protests taking place at proposed Fracking sites in the UK (the highly publicised protests at Barton Moss being just one example). These protestors have serious concerns about the effects of Fracking on the environment and the the way it could impact the lives of those living near to the proposed sites. So, what are the specific concerns and are they founded in truth, science or experience? Here we take a look at some of the worries and how seriously you should be taking them.

Wear from drilling operations

Currently wear on well casing from the fracking process is a problem that does need solving. Not only does the wear on the casing cause higher costs around the need for replacement or fixing but it can also be a contributory factor in any water and ground contamination that may occur.

There are suggestions and reports that a new way of managing the casing on the wells could prevent such contamination. The new suggestion is using cement to prevent the risk of contamination. Currently in America, cement is used to fill the gap in freshly drilled gas wells between the earth and the casing which is supposed to fill any cracks which would allow contamination to occur. However for it to be effective it must fill the entire space surrounding the well, from top to bottom, it is also important for workers to wait at least 8 hours for the cement to harden.

The issue is that often workers will not wait or will not pump enough cement to coat the well which has been attributed to cost saving measures.  This is possibly due to a lack of experience in the field (which we’ll cover next) and can lead to cracks forming in the cement and therefore contamination.

Lack of experience or expertise

There are other worries that those working, or planning to work on fracking sites in the UK may not be prepared or experienced enough at the scale that the operation requires. When this lack of experience happens the consequences can lead to other issues, such as those mentioned above.

This is obviously a problem with an easy answer, training and strict measures on site will ensure that contamination fears are quashed. That said, regulation and legislation remain a large area of concern among those opposing fracking in the UK.

Water contamination

We mentioned this earlier and how it can occur and there are obvious reasons for those living around potential fracking site to be concerned.  Many iof these concerns can seem justified by the fracking industry in the US where 6% of wells in a Pennsylvania region have sprung, and reported some sort of leak.

Leaks are potentially very hazardous as carcinogenic chemicals are used in the extraction process and allowing them into groundwater can affect wildlife and nearby water supplies.

The contamination to the supply can cause long term health problems for those exposed. Surveys on the chemicals used have shown damage to skin, sensory organs and in more extreme cases, effects on the brain and cardiovascular harm.

More work still needs to be done to see the definitive effects of Fracking on human health as well as environmental health, but with increased regulation and training, again this is something which can be addressed.

Environmental costs – large amounts of water use

There’s no denying that the large amount of water used in the fracking process can have a great environmental impact. For each well millions of gallons of water is used and obviously transporting such a large amount of water to a site will have significant environmental impact, especially from emissions, and will also put a large strain on local resources.  The counter argument is that the natural gas that is extracted has a far lower carbon footprint as an energy source than oil or fossil fuels which far outweighs the environmental impact the extraction process may have.

Tremors

One of the most well documented and publicised worries surrounding fracking is the risk of tremors or earthquakes. Some recent tremors have been attributed to nearby fracking sites, which scientists call ‘induced seismic events’.  Although  an increase in the amount of Fracking could lead to an increase of tremors, most earthquakes do only measure as small magnitudes on the scale.

Regulation

There have been previous worries that regulation of the fracking industry in the UK had been outdated and that new legislation was needed to make sure fracking was safe and that appropriate steps were being taken to minimise any issues such as leaks.

With regulations in place to ensure a safer practice this will not be an issue in the future and will in turn lead to less risk of environmental damage. Parliament are looking into new terms for regulation for the onshore oil and gas industry which should help implement best operational practice.

 

Sources: http://www.wearepowershift.org/blogs/cement-fracking-solution, http://serc.carleton.edu/NAGTWorkshops/health/case_studies/hydrofracking_w.html, https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&cad=rja&uact=8&ved=0CHIQFjAH&url=http%3A%2F%2Fwww.parliament.uk%2Fbriefing-papers%2Fsn06073.pdf&ei=eJJWU9-EIfGT0QWniYHYBA&usg=AFQjCNEhFud3UZQwOgaejL-C96qG9g0DSg&sig2=20ZgtBZSRCw7KqHOoLsrRQ&bvm=bv.65177938,d.d2k

Advice for money management as a freelancer or contractor

Many freelancers and contractors face a certain level of uncertainty surrounding their finances.  Variations in what and when you get paid can make managing finances complicated. We’ve put together some money management tips to help you take control of your money.

Open a business account

If you’re a freelancer or contractor who operates through a limited company where you’re the only employee you can opt to use your personal account for your business in-comings and outgoings.  However, it’s not the best idea for managing your business finances.  Setting up a business banking account makes it far easier to create a viable budget and manage your business accounts.

It will provide you with one place to receive payments and pay out any pension money, tax and business expenses. A business account could simplify how you keep track of your ins and outs as well as being able to see how profitable your business activities are.

Project income and expenses

Freelancing is rarely synonymous with a stable income and changes in your contracts may mean fluctuations in monthly income.  It’s important to have a monthly plan to control your business spending.

A good way to keep your budgeting in control is to project your monthly income and expenses by either taking an average for the year or to looking at spending with a glass half empty attitude (seriously). Look at the worst case scenario by projecting the lowest amount of income you might receive based on an estimate from previous months and years.  Combine this with an expense budget in line with your most spend heavy month to date. You’ll likely always spend less and earn more than your projections which will leave you with a contingency for anything unforeseen at the end of each month.

If you estimate your income and expenses to an average taken from the previous 12 months (if you have worked a previous year) then this should also be an effective way of budgeting for the coming months. If your income is steady this is probably the best way for you to estimate.

Set milestone payments

If you work on lots of larger projects and are worried about when you’ll get paid, because usually you don’t receive your pay off until the end of the project, then setting milestone payments could be a good option to help ease the stress.

Many freelancers set up a contract when accepting work with clients to allow for payments along the timeline of work. So, instead of a large payment at completion, you would receive agreed sums of money throughout a project. These can be set at certain milestones throughout your project and can be based on key phases being completed to give your client peace of mind too.  If your work is for a set number of hours or days then you can charge based on your time. If you have no definite way of splitting up the job then perhaps consider breaking it up into 25% blocks and charging for each of those to help maintain a steady income.

You shouldn’t be anxious about approaching your clients to suggest this option.  Many companies will be used to operating in this way, provided they have an agreed set of deliverables at each phase of the project.

 Contingency plan

Finally, a contingency fund is a must in the event you suffer gaps between contracts. If you can manage to do it, having a fund to cover 6-8 months of bills and expenses could be a real lifeline.  Hopefully you won’t have to resort to using it but just the security of knowing you’re covered for a period of time is a benefit in itself.

Having this emergency back-up will not only make you feel more secure and relaxed about your freelancing career but you’ll find you aren’t as desperate for clients, so if there are any you don’t feel quite right about then you don’t have to jump at the chance to work with them. The same goes for worrying if current clients can pay their invoices on time, you’ll have a fall back if they aren’t being punctual.  Finally, you’ll have more freedom to explore other opportunities such as going to events or taking on some training.

There we have it, some handy tips to make your freelancing financial life more secure. If you have any other tips or ideas we’d love to hear them, comment below or tweet us @Kingsbridgeprof.

Skills shortages around the world

We keep hearing about the worsening crisis of skills shortages in the UK, especially in the Oil and Gas and engineering industries. The fact of the matter is, if the crisis continues it may prevent businesses from taking advantage of economic recovery.  It’s not only the UK that’s suffering, many other territories are affected by a skills shortage in a variety of industries which is affecting their economy also. We’ve decided to take a look at the (potentially global) crisis to see what skills are lacking and where, and what plans are in place to bridge the gaps.

The UK

In a recent survey of over 90,000 employers it was shown that 1 in 5 job vacancies remained unfilled due to a lack of skilled applicants. This statistic accounts for 22% of vacancies overall, which equalled 146,200. That’s risen from 91,400 from two years previously.

The shortages are evident in trades like plumbing, health and social care, those with foreign language skills, manufacture and construction. The main reason for these shortages is a lack of skill in communication, literacy and numeracy. It can also be attributed to the fact that employers are hiring employees with a higher level of skill and knowledge than what’s actually required for the role, which can often lead to bored and unmotivated employees.  Low paid- low skill jobs don’t appear as desirable for British workers; this also adds to skill shortages. However, immigrants from eastern European countries are increasingly happy to take these jobs which helps to fill the job market.

Other issues may be that companies aren’t investing as much as they should in training and development; during the recession cutbacks were likely to have been made to this particular work initiative. A public push of the importance of role training and development within the media would help to ensure that workers are progressing and learning new skills to become proficient in their industry.

Looking at the disciplines that are suffering most from the shortages on the surface it seems we need to encourage more young people to pursue subjects like science, technology, engineering and maths to help fill future roles in the industries that are currently suffering.

Australia

The skills shortages in Australia are mainly linked to the mining industry; in the past few years much of the debate about the shortages has focussed on the need for migrant workers to come to Australia to fill the open jobs.  The current plan is to boost immigration intake by 30,000 a year to meet the skills shortages. Back around the early 2000s there was a mining boom which set of a massive growth in mining employment, but since the middle of 2012 it’s seen a huge downturn in growth suggesting that a lack of skills are beginning to affect the industry.

Similarly the engineering industry in Australia looks set to suffer a skills shortage in 2014. A slowdown in major infrastructure projects has led to companies focussing on smaller projects which have then led to senior workers moving overseas to gain the right job for their skills, or even retiring.

The lack of engineering and other skills in Australia will require targeted policies from Government and industry to support an effective approach to training, attracting and retaining the right sort of talent.

Europe

A recent report has shown that around a third of companies in Europe are struggling to find employees with the correct skills for available jobs. Of those vacancies over a quarter of employers said that they were unable to fill entry level jobs over the last year. For some this caused major business issues which could have been detrimental to their future.

Across the EU of the economically active population, 10.9% were unable to find work and for those under the age of 25 the figure rises to 23.6%. The countries with the highest unemployment rates showed the highest skills shortage, which suggests that there is a problem with educating and getting young workers involved in the industries suffering with shortages.

The report did show that the employers struggling did not engage enough with the education system and that those educating were wholly too optimistic of their students’ chances of finding work. For the shortages to cease there would have to be greater collaboration between educators, businesses and policymakers. A suggestion has been made to offer students’ financial support when studying for courses with a strong employment record and also for more businesses to sponsor students in their studies. As well as offering greater flexibility for those studying whilst working.

So there we have it a look at just some of the skills shortages around the world. With a push for greater links between the education and industry it is likely that the skills gap will begin to close. We’d love to hear your opinion, leave a comment below or tweet us @kingsbridgeprof.