Knowledge

We help make your business a success

Defining you: contractor, freelancer, micro business, small business…

Crunch is an online accountancy service which serves the small business community. Our customers span a range of different self-employed types. Some are contractors, others are freelancers and some define themselves as micro-businesses.


But what’s the difference? Time to jargon bust.


The shrewd small business


This is largely a blanket term which can be used to refer to micro-businesses, freelancers and contractors.


Sections 382 and 465 of the Companies Act 2006 define a small company as one which has a turnover of not more than £6.5 million (with a balance sheet total of not more than £3.26 million) and no more than 50 employees.


The masterly micro-business


The term micro-business is often used informally to describe a business which is a bit smaller than you average small business. It’s often used to refer to companies making less than £2 million per year employing less than 10 people.


The canny contractor


The term ‘contractor’ is often used interchangeably with ‘freelancer,’ but there are key differences. As the excerpt above highlights, contractors usually work on site at a clients office whilst freelancers often work wherever whenever.


The industry can also effect your status. Those who work via their own company in the IT field are usually known as contractors. But things can get confusing: when an IT contractor becomes a consultant, they are sometimes referred to as ‘freelance consultants.’


Last, but not least obvious, is the fact that contractors usually work via contracts!!


The thinking freelancer


Freelancers work flexibly often without a contract. They may work on site or work from home. Once again the industry can offer a clue, so if someone is self-employed as a writer you can be sure that they’re a freelancer.


In summary


A freelancer or contractor can also be defined as both a micro-business and a small business. Annoyingly, this definition can vary depending on who you’re talking to; for example, energy companies and banks may have their own interpretations for what constitutes a small business. This is why such terminology is used rather loosely.


But regardless of which one of these you may be, Crunch’s online accounting service is perfectly suited to your needs!!

Our invoice templates are professional and sharp. Use them to directly invoice your clients and get paid fast.

From understanding expenses to starting a limited company, our downloadable business guides can help you.

If a client hasn't paid an invoice, download our late payment reminder templates and get that invoice paid fast.

With your own limited company you get to define your brand, own everything you do, and run your business in the most tax-efficient way.

While changes to dividend allowance & VAT Flat Rate Scheme have increased the tax burden for many a limited company director, the picture is still positive.

'From Crew to Captain' author David Mellor explains what traits and experience to look for when successfully choosing a business partner.

The best accounting advice

Our accredited team are on hand to help you choose the best package

We understand that it can be difficult deciding whether or not to switch accountants, but at Crunch we’ll offer you fair, unbiased advice on what’s best for you.