It seems like the modern economy is changing our conventional working habits; a phenomenon which some people are beginning to make into a positive. There are a lot less ‘normal’ 9 to 5 office jobs these days, so more and more of us are becoming self-employed or freelancers.
Freelance writers, builders, designers, decorators IT firms and website developers are all becoming much more commonplace. At first the groundwork may seem more hassle than its worth, and you might miss the diminished responsibility of working in an office where all of your working needs were catered for by big HR departments, but you’ll find that the whole bureaucracy of self-employment isn’t actually very taxing.
Freelancers can be under temporary contract to a company where all of their taxes will be filed by the employer, or they can be self-employed doing all of their own admin and tax returns. The latter option is becoming ever more popular in the growing creative industries and it’s all very easy to register your self-employment, even the tax return bit is fairly simple.
Visit HMRC for self-employment advice.
If you’re selling a service you’ll need a website with catchy domain names and slick advertising, and this isn’t necessarily too hard when you enlist the right services. If you’re in a trade where you’re working for individual clients instead of for a company, you’ll need to learn the art of things like invoicing. You’ll also need to discover the best protocol for charging your clients e.g. Partial payment up front and the rest on completion of the work. This is always industry specific so be sure to understand how this works before you start on a job.
It is advisable to have a cash float in the bank in case a client tries to avoid payment. This will not always happen but it is essential to be prepared for it in case it does. Keep a record of all the work you agreed to do and all the work you have done – try to get sign off along the way, in writing. This will lessen their reason not to pay you.
Payment Tracking Apps: Freshbooks, ClearBooks, Kashflow
Remember that once you enter the public domain, you naturally become liable for anything that might go wrong as a result of your advice. This means you need to take out the right insurances, Professional Indemnity being primary amongst them. This form of insurance protects you in the event that an unexpected claim is made against you or your business for any negligence or unintentional breach of copyright or confidentiality.
Professional Indemnity Insurance is vital if you’re providing a professional service such as advice or guidance. Accountants, IT firms, consultancy firms and solicitors all need Professional Indemnity in case their advice or service is deemed negligent.
If your business, in any way, comes into contact with the public – which includes people coming to your house - you may also need Public Liability Insurance. This protects you against any damage that you cause to a person’s property or to them. Some contractors to the public sector won’t be granted work unless they have Public Liability Insurance.
Find out more about professional indemnity insurance.
Whatever the scale of your business, working for yourself can be a truly liberating experience and the process is often much less technical than you may imagine.