If you’re a trades business owner in the UK, you understand the importance of every penny in your budget. Whether you’re self-employed, running a small start-up or managing an established company, the decision to take on more help is huge. While hiring an employee might seem like the obvious thing to do, there’s a smarter choice that’s becoming more and more popular: hiring a UK Virtual Assistant. In this blog, we’ll break down the costs associated with a UK VA when compared to hiring an employee. Tax, National Insurance, and more. You’ll soon see why you’ll be cutting costs: hiring a UK VA for your business.
Employee or VA: The Initial Costs
Let’s look at the upfront costs of hiring an employee when compared to a virtual assistant.
Recruitment Costs
Employee: Advertising job opportunities, sifting through a mountain of CV’s, holding interviews, and getting references can be both time-consuming and expensive. You might need to pay to advertise the job or use a recruitment agency which can cost hundreds if not thousands of pounds depending on your location and the role.
VA: When hiring a VA, you can work with agencies that have pre-screened professionals, reducing the time and cost, but often, you can find a VA more quickly and without the upfront expenses. There may be people you know who already use a VA and therefore you can get a recommendation.
Salary and Benefits
Employee: You’ll need to negotiate and offer a competitive salary to attract the best candidates. Additionally consider the cost of benefits such as pensions (auto-enrolment), healthcare, and paid leave.
VA: With a VA, you only pay for the hours worked! No fixed salary and costly benefits and this flexibility can lead to huge cost savings.
Office Space and Equipment
Employee: Providing office space, equipment, and supplies for your employee is an expense not to be sniffed at. Rent, utility bills, business rates, insurance, maintenance, laptops, and stationery, all add up.
VA: A key advantage of a Virtual Assistant is that we work remotely, so you don’t need to supply any office space. No office space means no associated expenses. They use their own equipment and cover their own utility costs, which leaves you free from worrying about that.
Tax and NI: The Hidden Costs
Okay, so maybe not ‘hidden.’ We all know what they are but do you realise the true cost to your business? This can come as a surprise to some business owners and often, too late when they’ve already employed someone.
PAYE (Pay As You Earn) Tax
Employee: When you hire an employee, you are responsible for withholding and paying their income tax through the PAYE system. This includes calculating and deducting the correct tax from their salary each month. To avoid errors, it’s likely that you will need an accountant or payroll professional to do this for you, that’s the first cost.
VA: Virtual assistants are considered self-employed. As a result, they’re responsible for paying their own PAYE and NI, meaning there is no cost to your business.
National Insurance Contributions
Employee: Employers are required to pay the employer’s National Insurance contributions, in addition to the employee’s contributions. This can mount up depending on job role and salary.
VA: VAs will handle their own NI contributions on their self-assessment returns so no financial responsibility for you or your business.
Sick Pay, Maternity/Paternity Leave, and Holiday Pay
Employee: When employees are away from work for whatever reason, you will need to pay them for this time. How much depends on their contract, salary, etc. but it can soon mount up!
VA: With a VA, you only pay for the time they’ve worked. If they’re unavailable due to illness or they’re taking a break, you don’t incur costs for this making it easy to budget for their time.
The Bottom Line: Cost savings that add up
By now, it should be becoming clear that there are quite large cost savings to be had by hiring a UK VA over an employee. The flexibility, reduced admin costs, and lack of tax and NI contributions make hiring a VA a great choice for your finances!
“Look after the pennies, and the pounds will look after themselves.”
Opting for a VA can help you do just that.
Is Kettlewell VA the perfect UK VA for you?
I hope this information has helped you. If you’re ready to take a step forward in growing your business and getting back some precious time, I can help. There are a few ways to contact me and you’ll find them here.
Through running my own trade business, I know how stressful it can be. How nice would it be to offload some of that to someone else?
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