Freelance working shows its value

Last October, I spoke about our research into freelance working in the accountancy and finance sector and how freelancers manage their own business and tax affairs. As this is very much a growing trend in the sector, we took our research a step further to examine the earning potential for freelance accountancy and finance professionals. We discovered that the average salary for freelance accountants working via an umbrella is over £66,000 per year.

This is based on the fact that the average hourly rate for umbrella accountancy freelancers in the UK currently stands at £35.37. Calculated on a 40-hour working week during a 47 week working year, this equates to an annual salary of £66,495.60.

There are currently in excess of 86,000 accountancy professionals working on a freelance or interim basis in the UK, and many leading industry experts and commentators expect this figure to grow.

This visibly growing trend for using freelance professionals in the UK is largely due to the reduced costs associated with employing an interim manager as opposed to a permanent member of staff. The accountancy and finance roles being taken by temps in the current market cover everything from project accountants, purchase ledger clerks and business analysts, to interim finance directors and financial controllers.

Despite the Office for Budget Responsibility announcing at the close of 2010 that the economy is currently recovering better than expected, there is still a nervousness in the business community, particularly for SMEs, who are finding it difficult to secure finance to invest in their business and its growth. This means they are reluctant to employ permanent team members.

The public sector spending cuts will only add to this; a recruitment freeze in the public sector, followed by expected jobs cuts, means that there will be more opportunities for freelancers. This is particularly true in the departments where the work still needs to be done in spite of the cuts.

The advantage for the public sector having access to freelancers is that it will also have access to highly skilled, experienced and motivated individuals to complete projects without the need to supply a host of benefits, particularly pensions, and no redundancy costs when their services are no longer required. There is also the option to include longer payment terms in any contract, compared to paying employees on a weekly or monthly basis, which then creates cash flow savings for the public sector. This was of course one of the suggestions made by Sir Philip Green in his recent public sector spending review.

And when you think of the tax and lifestyle benefits of working on your own account, be it via an umbrella or limited company, all of this adds to the attractiveness of employing freelance professionals on a temporary basis. It also highlights the fact that there are opportunities out there for highly skilled, highly motivated accountancy and finance professionals who are looking to add a bit more flexibility to their working life.


Rob Crossland is the Chief executive of the Parasol family of companies, which also includes ClearSky Accounting, and provides umbrella PAYE services to over 9,000 freelancers in the UK.