Kick off the new tax year with 50% off ANY of our accountancy packages!
As a freelancer, at some point you will most likely be confronted with the prospect of subcontracting, be it an offer to do it for someone else, or the need to find someone to subcontract for you. The question is, is it worth it? Whichever side of the fence you’re on, there are pros and cons.
The first thing you need to make sure of when dealing with subcontracting is your employment status. You need to be sure that you, or the subcontractor you’re hiring, are actually a subcontractor and not an employee. Getting this wrong could land you in all sorts of mess later down the line with contract and workers rights.
If you’d like some information on how to figure out your working status, check out our “Am I an employee, a freelancer or a worker?” article. You can also check out our article on “Eight clauses your freelance contract shouldn’t be without” for support when you’re putting together your contract.
You can also find out more about IR35 at our IR35 hub. From here, you’ll be able to access all of our jargon-free Knowledge articles, our downloadable business guide, and learn more about our IR35 service.
You’ve been offered an assignment you just don’t want to pass up. It’s from a massive client who you can’t miss working for, and the money seems nearly too good to be true. Problem is that this assignment is huge and you’ve already got some work on your plate. Is it worth the risk of trying to tackle it all alone? It’s an idea, but chances are you won’t do as a good a job as you know you could. There’s no way you want to disappoint a client like this, but you know passing it up means you’ll be unlikely to be asked again. One option remains; bring in a subcontractor.
It’s a useful thing to be able to do as it means that you can take on assignments or projects that you just can’t do on your own and still complete them to a standard you’re happy with. It opens the market up to you a bit too, as it means you can search out bigger contracts than previously. It removes some restrictions for yourself and it will help you continue to build your portfolio as you go along. It does bring some extra stress though.
Project management now becomes a much bigger part of the day-job (do not forget to consider this when negotiating your fee). You have now, essentially, become a client to your subcontractor and you need to make sure they do a good job as it is your reputation at stake. This can be difficult if you’re not used to managing people. Make sure you do a bit of research on your new subcontractor before you take them on. Look out for tell-tale signs as well; if they take ages to reply to an email, imagine how long it will take them to finish their project.
You’ve built up some experience and a decent portfolio, but you’ve hit something of a wall. The jobs aren’t getting much bigger, and neither are your clients. You want some work that will boost your reputation and hopefully take you up a level. A great way to do this is by subcontracting for someone else’s bigger project. This gives you the chance to work on a much larger job than you could pull in alone.
Unfortunately, there is a fairly high chance that you will not get any credit for the work. This means it will be no help to your portfolio and to some, that maybe a deal-breaker. Make sure you discuss this with your prospective boss before you agree to start the job. The pay might also be lower than what you’re used to too, so that is also something to consider. There are a few sacrifices to make by being a subcontractor, but they can often be outweighed by the positives of a new, interesting and prestigious project.