There are some practical considerations you need to look into before you establish yourself as an Interim Manager.
Because of the nature of interim work, our clients usually require an Interim who can start as soon as possible. Contracts usually start within two weeks of us taking the brief and as a result we are unable to consider people currently working in permanent roles with notice periods of one month or more.
If you would like the flexibility of working for a day rate rather than pro rata salary, you should consider setting up your own Limited Company, this will give you the most flexibility. If you are not planning to work as an interim in the long term, you might prefer to use an umbrella service. These are companies that provide professional accountancy and legal services and they will register an individual Personal Service Company (Ltd Company) for you, through which you can be paid.
If you decide to set up a Limited Company, you will need to hire an accountant for general financial advice and help with your tax returns.
One other aspect of working on a contract that you should be aware of is IR35. This is a piece of legislation introduced by HM Revenue & Customs to gauge whether an interim can be deemed an employee of the contracting company for the purposes of tax and NI collection. If you are deemed to be working ‘within’ IR35 while on a contract, you could be liable for full PAYE tax and NI, whereas Ltd Company contractors who operate outside IR35 pay preferential rates of tax.
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There are no guarantees that one contract will immediately follow another when you become an Interim, so you need to have a financial buffer to protect you between contracts.
Professional Indemnity Insurance covers you and your business in the event of damages being awarded against you due to professional error, omission or an act of negligence towards a third party to whom you owe a duty of care. As with any insurance policy you may well never need to make a claim, but you do need to have the insurance.
Through your Limited Company
If you are set up as a Limited Company, we will pay you the gross amount, based on the number of days you work – you are not entitled to holiday pay or sick leave and will not receive any other benefits. You will be responsible for paying your own tax and National Insurance so we recommend that you have your own accountant to support you with this.
Via an Umbrella Company
If you do not have your own Limited Company, or are not planning to work as an interim in the long term, you might prefer to use an umbrella service. These are companies that provide professional accountancy and legal services and they will register an individual Personal Service Company (Ltd Company) for you, through which you can be paid.
The benefits of using an umbrella service are that it is very quick and easy to set up and you don’t have to worry about paying your own tax and NI or engaging an accountant to manage your finances.
Fixed term contract PAYE
If you are offered a fixed-term contract, for example to cover maternity leave, you will be paid via the client’s PAYE system and will be entitled to holiday and other benefits on a pro rata basis. The client will take your tax and National Insurance contributions at source and you will be paid the net amount monthly in arrears.
Daily rates vary from assignment to assignment, depending on industry sector, discipline, location, length of contract etc. If you would like to discuss what you might expect to earn as an Interim Manager please call the interim team on 020 7436 4243.
If you are interested in registering with VMA Group, whether for permanent or interim assignments, you must show us proof of eligibility to work in the UK, regardless of whether or not you are an UK/ EU citizen.