What is freelancing? How to be a freelancer
Becoming a freelancer is a great way to make your passion your job. From how to get started to what you need to consider, find out what you need to know.
What is a freelancer?
Being a freelancer is when you work for yourself, either as a full time job or on the side of a PAYE job contract (subject to your contract’s terms). When it comes to tax, you will be working as a sole trader even if you prefer the label of ‘freelance’.
Working as a sole trader comes with responsibilities different to those of a PAYE employee. You will need to find your own work, pay taxes, and finance all costs of your business.
It’s your choice of how you choose to work. You could either take individual jobs, or work with longer term contracts. You could work from home, remotely, in your own office, or in-house at a client’s company.
How to be a freelancer
The first thing you need to consider if you want to start working freelance is to register as a sole trader with HMRC.
Finding jobs and clients
To start working freelance you’ll need to find jobs or clients. The good news is that there are lots of different places you can start looking to get work.
- Jobs websites such as LinkedIn
- Specific freelance networks like Twine
- Contacting companies directly to pitch your services
- Networking at events
- Word of mouth recommendations
- Doing your own marketing so potential clients or customers can find you
What do I need to consider?
Before going freelance you should make sure you understand the responsibilities you will have which are different from working as an employee.
You must file your Self Assessment tax return annually. You should also contribute to your pension yourself, and pay your own National Insurance. These costs should be taken into account when you are pricing jobs. If you earn over £85,000 annually, you will also need to submit VAT Returns though Making Tax Digital.
Managing your finances
Although the responsibilities of becoming a freelancer can seem daunting, choosing the right tool to do your accounting can take the pressure off managing your finances.
Bokio is a cloud accounting software that lets you do your bookkeeping and invoicing in one place. You won’t need to switch between software or wait until you’re at a computer to get your accounting done. Bokio is flexible, which is the perfect solution for freelancers.
If you decide you want to work with an accountant to help keep your finances in check, you can find an accountant through Bokio here.