For many people, the idea of starting a freelance business is very attractive. It’s even more attractive if you’re currently unemployed or stuck in a job you don’t like. The benefits, such as being your own boss, choosing your own working hours and doing work that you actually enjoy are hard to resist. Freelance working also has its share of challenges, too, of course, but with the right preparation, attitude and offering a commodity or service that people are willing to pay for, you can overcome all the challenges.
Making a Start
Whether you’re going to be based at home doing online work, or you’re a freelance gardener whose work will keep you outside most of the time, you need a permanent place in which to handle your business affairs. Depending on your needs, that can be anything from a laptop on a kitchen table to a fully equipped rented office or workshop. Whatever you do, keep your operation well organised by assigning regular times for such activities as scheduling jobs, keeping a record of earnings and expenses, and creating promotional material such as flyers or online advertising. The more organised you are with this part of your business, the more efficiently you can run your operation and profit from its success.
Obtain Adequate Insurance
Don’t underestimate the importance of insurance. A common mistake is to insure large and expensive work tools, equipment and premises but forget about important cover like mobile phone insurance. Losing your iPhone without having iPhone insurance can cost you dearly not only in replacement costs but also in lost work. In addition, depending on the work you do, public liability insurance may be very important, too. If you inadvertently damage someone’s property or health through negligence in the course of doing paid work, you could be sued for an amount that would put an instant end to your dreams of running your own business.
The Official Position
As a freelancer in the UK, your earnings are taxable, and on starting your business, you need to inform Her Majesty’s Revenue and Customs (HMRC) that you have become a self-employed ‘sole trader’ from your chosen date. It’s just a simple phone call, and they’ll send you a form for you to submit with your details. You’ll be required to keep accounts and submit them once a year to HMRC, who will tell you how much tax, if any, you owe for the preceding year plus a bill for National Insurance contributions. If you’re starting small, then you don’t need an accountant to handle your accounts. It’s easily done via HMRC’s online Self-Assessment procedure, and the UK Government website explains it clearly.
A terrific source of information and help is Citizens’ Advice. They can advise you on any newly introduced legal requirements, and they can also point you in the direction of free government grants that you may be eligible for, or sources of low or zero-interest loans that may be available from reputable lenders.