Becoming a freelancer means that you can register with the Inland Revenue as being self employed and can be hired by other people or organisations to work on projects for a set period of time in an agreed commercial framework.
In essence, becoming a freelancer is becoming more appealing to many people because of the following reasons:
- More money: as a freelancer you will often get paid more than staff working for the same organisation, as employers aren’t responsible for paying your National Insurance, holiday and sick pay.
- Time efficient: you may be able to complete projects in a fraction of the time allotted for the task, by utilising tools and skills specific to you.
- Less tax: you can claim back your expenses against your income tax bill.
- Creativity: allows you to use your creative skills to make a living, rather than defragmenting your skills and moving outside the functional sector you wish to work in.
- Flexibility: being your own boss means that you can decide where and how much you work. It is not a tied 9-5 existence.
- Variety: an opportunity to work on different projects and to help broaden your skills and experience. Freelancing allows you to broaden your networking channels and to pinpoint the type of organisation to work with in the future. You can broaden your experience skill set and get paid to do it, very helpful if you decide to return to a PAYE role in the future.
- Work/leisure balance: on average most freelance workers can save in the region of 8 hours per week on commuting of which most saved hours are used for creating extra work or enjoying leisure activities.
- Green credentials: a supplement to the freelancer work style is a reduction of your individual carbon footprint through less travel, which as you know has become one of the Government’s flagship targets.
- Extra source of income: should you so wish to become a part time freelancer or a “home worker” it is a perfect way for you to supplement your existing earnings capacity.
On the other hand, there are some less appealing attributes;
Unlike being employed, you are responsible for paying your tax and National Insurance contributions, which for some people can be daunting. Very often you will work remotely from your client’s premises, although for some projects you may be required to work in-house
If you are becoming a freelancer you need to be aware of some of the challenges that might lie ahead. These include and are not limited to:
- Less security: you are not guaranteed continuous work unless you negotiate and plan ongoing projects from several sources. Therefore you do not have a reliable income that continues whether you want to take time off or are not available to work.
- More than just the current project: being self-employed means that you have to continuously multi function to manage you own business i.e. you are the finance manager, the administrator and the marketing manager which means that you are responsible for promoting yourself in order to generate awareness to clients or project owners and to generate sufficient income.
- Isolation: being a freelancer can be lonely, especially if your work is home based and making decisions without a support network can be hard. On occasions should you work at a client’s premises, you need to be able to adjust to the different working environments.