Career Testing
Career Testing
Career Testing
FREELANCING / OCT. 10, 2014
version 5, draft 5

5 Things You Need To Know Before Becoming a Freelancer

Do you like the idea of working for yourself rather than clocking on as an employee? If so, becoming a freelancer could be the ideal vocation for you.

Of course, leaving the occupational rat race behind to become a professional lone wolf is a very big step. Indeed, there are a multitude of aspects which require consideration and a whole swathe of issues that need to be carefully weighed up before you finally leave the land of the commuter and take up your position as CEO of WorkingForYourself Inc.

With this in mind, I thought I’d give you a heads up and highlight some of the more important (and perhaps less obvious) things you’ll need to be aware of when becoming a freelancer.

1. You’ll need to take care of your own tax
In the days before the Internet took over the world, even the thought of filing a tax return was enough to keep most freelancers awake at night. Indeed, the prospect of going through all of your receipts and invoices, adding everything up on a pocket calculator and trying to neatly enter all relevant information correctly on the paper form was a uniquely stressful experience. Fortunately, things are much easier these days as HM Revenue & Customs (HMRC) now allow self-employed individuals to file their tax returns online via a Self-Assessment portal. While this makes sorting your tax infinitely easier (it makes all the calculations for you), it doesn’t mean you can just sit back and believe filling out an online return at your leisure is all there is to it. For example, if you don’t complete your return by the deadline (normally 31 January) then you’ll get hit with an immediate £100 penalty fine. And, if for some reason you’re more than three months late at getting your tax return in, this penalty fine will rise to an even greater amount.

Remember, Income Tax is only one facet of tax that needs to be paid; you’ll also have to contribute National Insurance contributions as well. For most freelancers, this means paying Class 2 NI contributions every month and one lump sum of Class 4 NI contributions at the end of the tax year. If you have a rough idea of the kind of money you’re likely to make in your first year then you can use a handy online calculator (like this one here) to estimate the amount of tax and National Insurance contributions you’ll have to pay.


2. It WILL have an impact on your home life

Regardless of what your particular profession might be, chances are you’ll be working from home when you first become a freelancer. If you live alone then this will of course be no problem. However, if you live with a partner or have a family then you can expect a certain amount of friction to arise at some point or another. This is because trying to make a work environment (peaceful, neat, tidy) and a domestic setting (noisy, cluttered, busy) co-exist is a near impossible task. In time, you’ll get annoyed whenever the TV/postman/spouse/child interrupts you, while those living with you will get irritated by the fact you expect them to ’walk on eggshells’ in their own home. The solution here is obvious: do everything you can to keep your work life and home separate. If you have a spare room/summer house/garage then turn it into a home office. Alternatively, if you are fortunate enough to live near a public library (and your work doesn’t require you to be talking on the phone all the time) then decamp there a few times a week to make the most of the peace and quiet.

3. Not all of your time spent at work will be paid

In an ideal world, your freelance career will start off with plenty of work and stay that way for as long as you want to stay self-employed. As we all know though, the world we live in is far from ideal. The commercial marketplace ebbs and flows, so while there might be plenty of work around for you one day, there’s no guarantee it will be like that a month or even a week down the line. This means that there will be times when your days aren’t filled with paid projects to be getting on with.

It is important to recognise from the outset that this is not ’dead time’ to be written off simply as “nothing doing” while you wait for something to crop up. This is time which you need to use to cultivate new/more work; it has to be spent increasing your online presence, searching through job listings, sending off emails/CVs/portfolios to potential new clients, registering with employment agencies and even getting in touch with previous clients to see if they have any work in the offing. While it may not be bring you any immediate revenue, getting into the habit of sourcing additional revenue in such a proactive way will undoubtedly prove profitable in the long run.

4. Bank holidays/sick leave/holiday pay doesn’t apply

It’s normally only when you leave full-time employment that you notice all of the little perks you used to take for granted. Of course, I don’t mean being able to use the photocopier for free or ’borrowing’ reams of high quality printer paper; I mean getting paid when you’re not actually doing any work. When you’re self-employed, being paid to go on holiday, rest from illness or have a Bank Holiday lie-in is the stuff of dreams - if you’re not working then you’re not earning. On the plus side though, working as a freelancer means you can go on holiday whenever you like, consign yourself to your sick bed without having to phone anyone and - if you feel inclined to do so - treat every Monday like a Bank Holiday. Swings and roundabouts.

5. It’s addictive
Because it is such an unpredictable and often quite stressful way of generating revenue, it is common for freelancers working in all fields to question their commitment to the cause from time to time. For sure, the temptation to ’return to the fold’ and enjoy the trappings of a guaranteed salary, paid leave and an annual Xmas party can be very strong indeed when times are tough and the work isn’t rolling in.

Despite this however, there is something about freelancing that makes it very hard to give up. Indeed it is not an overstatement to say that, for many, working as a freelancer is really quite addictive. There are a number of things which may explain this. For instance, the ’swimming against the stream’ coefficient, i.e. doing something which is still somewhat at odds to conventional thinking, has a lot of appeal. In a similar vein, taking on the responsibility for (and hopefully succeeding at) generating an income off your own back really does feel pretty darn good when things go right. And then of course there are the more obvious fringe benefits too: being your own boss, not having to commute, not being forced to spend time with people you don’t get along with, no corporate team-building days, etc, etc: these can all help to make the life of a freelancer feel more like a self-styled adventure than a vocation. Simply put, once you go down the self-employed route, working in the traditional manner often seems just a bit, well...ordinary.

If you’re thinking of becoming a freelancer or have recently started off down the self-employed road then please feel free to leave a comment or contribute some advice of your own.



Image courtesy of Lifehacker.co.uk, How to Make your Self Assessment Tax a Breeze

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