Freelancing contracts

[Mortimer Jazz]

Just been reading Ricod's post on non-payment for services :(

so far I've always contracted on-site and never had to face this problem but my sympathies lie with Ricod and it's got me thinking...

How many of the freelancers here present their 'employer' with a written contract before hand and is it deemed acceptable for it to require payment for all work carried out regardless of it being used or not?

To my mind that could loose you the job, even though people who work on-site will get paid hourly regardless....unless you word it well!

I certainly agree that work should be stage-based with sign-offs for each stage.
Do people here know of any good places to get a standardised and reasonably priced professional contracts drawn up?

ps and what's your favourite flavour of jam?

[Jesse]

Whenever possible I present an employer with a contract which they must sign, or at the very least a contractual email to which they must agree. I never hand over source until after payment and all SWFs I send (where possible) are obfuscated Flash 5 files. Unfortunately there are unscrupulous ppl out there and while these steps might seem a little over the top, I've been burnt once and it wont happen again.

[vilehelm]

It could loose you the work, yes and no. I sort of play it by ear. Larger companies are used to that sort of thing and you either are engaged as freelance help wich is hourly and under 1099 (American Tax Code Stuff) or you set-up a standard contract. Heck sometimes they come to YOU with them.

But it's those smaller jobs that are the hard ones to figure out. Like your neighbor who has a small business site that he needs built for a couple grand at the most. Is it worth it there? Does that bring the money above the table?

I MIGHT frame it like this:

[HYPOTHETICALLYY SPEAKING]

If you want to bring the money above the table we'll have to be ultra-professional and do a contract. Yes you you have to sign it but you also get the benefit of writing it off on your taxes because part of the contract will be a reciept...that way they get something out of it. If everything is below the table then they ain't gettin no reciept cuz I ain't claimin' it as income.

If it's $1000 or above I would think they would see the light and take the deduction

[/HYPOTHETICALLYY SPEAKING]

So I MIGHT pose it to a small business owner that way if I was the sort who would do that sort of thing...

ps. It's also important to note that small jobs, under $500 I think, usually do not show up as a blip on the radar screen of the IRS. Correct me if I'm wrong anyone who might know better and I'll edit.

[Mortimer Jazz]

that makes v.good sense. I'll bear that in mind :)

Contracting/freelancing over here has become a bit of a nightmare since they introduced this ruling called IR35.

It's one of those laws that even confuses accountants, but from what I understand, if you contravene it you effectively get taxed twice (once as the company director and once as an employee of your company!) which can work out at a LOT of tax!

The worst part is, if the Inland Revenue accuse you of being in breach it's up to you to prove you're not, and because it's so vague it's a bit of a losing battle.

This has just led to lots of people doing cash-in-hand jobs, and as a result, more likely to get fleeced.

I don't want to get into the ethical argument of whether it's right or wrong, but something occurred to me the other day that highlights tax over here.....and most likely everywhere!

<tax id="unfair">
I get paid (I get taxed on that). I pay my landlord the rent (he get's taxed on the money again). He dies and leaves the house to his children (they pay inheritance-tax on the value of the house)</tax>

The same money being taxed 3 times! Lol.

[vilehelm]

I'd suggest looking into LLC's (limited liability corporation). Ask your accountant about if you have one it might make sense to set yerself up that way if you're a one person operation.

I have friends who have a small company (4 people) and they have a running joke that Uncle Sam is the fifth employee and he ALWAYS gets paid! ;)

[farafiro]

The best articles I've ever read about this and other subject was in
http://www.scottmanning.com/archives