Freelancers and self-employed people will be well accustomed to criticism from employed friends and colleagues.

It’s not uncommon for a freelancer to hear ‘that they get paid more for doing the same job’ or that they ‘do whatever they can to avoid paying taxes’.

If freelancing was as easy and well paid as some people like to make out, well everybody would be doing it.

The fact is that freelancing is fundamentally different to employment. There is an added dimension of risk that many people in reasonably secure employment fail to understand.

But that hasn’t stopped the government trying to penalise the self-employed.

Freelancers that work through a limited company have suffered successive dividend tax hikes.

These increases were designed by the government to reduce what it calls ‘tax-motivated incorporation’.

And before the Chancellor dropped it from his Spring Budget in a spectacular U-turn, the plan was to charge self-employed people 2% on their National Insurance contributions.

Far from the old view of self-employed people as entrepreneurial risk takers, many freelancers are now viewed with suspicion.

In some quarters of the media and public, self-employed people are portrayed as no-good money-grabbers who will do anything to avoid their tax liability.

Most of this criticism is unfair.

While it generally true that self-employed people are paid more than people in employment. And self-employed people do, on the whole, pay a lower proportion of their income in taxes, there are dozens of extra risks and costs that many employees take for granted.

Here are just a few typical costs that contractors have to pay, which many employees take for granted:

• Holiday pay
• Accountancy fees and costs of paying taxes
• Sick pay
• Maternity/paternity leave
• Childcare costs (subsidised by many employers)
• Lunch costs (subsidised by many employers)
• Insurance
• Professional certifications and membership costs
• Training costs
• Tools
• Vehicle costs (no company cars for self-employed people)
• Computer costs
• Software costs
• Pension contributions (without top ups from employers)
• Accommodation when working away from home
• Travel costs when working away from home
• Business phone bills
• Business internet bills

For more information visit  www.umbrella.co.uk or email team@umbrella.co.uk