Freelance - what do you need to get started

jwac

Hello

I'm looking for some advice regarding freelance work

I've been contacted by a former colleague who has asked if I'm available to do some freelance design work for them - I really want to take the job, but I've never done freelance work before and I'm trying to find out what I need to do. I've searched online but most of the advice is regarding setting up a business, as I'm currently employed full time this is not something I want to do at this stage, but I do want to take small design jobs outside my employment.

I'm trying to find out if I need to register in some way, the tax implications etc.

Any advice would be really appreciated!

Thank you!

soolin

jwac wrote: »

Hello

I'm looking for some advice regarding freelance work

I've been contacted by a former colleague who has asked if I'm available to do some freelance design work for them - I really want to take the job, but I've never done freelance work before and I'm trying to find out what I need to do. I've searched online but most of the advice is regarding setting up a business, as I'm currently employed full time this is not something I want to do at this stage, but I do want to take small design jobs outside my employment.

I'm trying to find out if I need to register in some way, the tax implications etc.

Any advice would be really appreciated!

Thank you!

You do need to set up a business but can do it easily as a sole trader, the fact that you are employed already makes no difference. Register with HMRC and basically that's it, then when you do work just supply an invoice and keep details of your income and all expenses connected with the freelance work for your end of year returns.

jwac

Thank you - that sounds a lot more straight forward than I feared.

jwac

Sorry one more question I've been unable to find the answer to...

Will my earnings/tax as a sole trader have any impact on the tax I pay under my employment?

ElefantEd

jwac wrote: »

Sorry one more question I've been unable to find the answer to...

Will my earnings/tax as a sole trader have any impact on the tax I pay under my employment?

No (assuming you already earn more than your personal allowance). Basically at the end of each year you declare your earnings (online is easiest) and pay tax on them at the appropriate rate - 20% unless it takes you into a higher tax bracket. When you do your declaration of earnings you will be asked about your main job as well, but that's simply a matter of copying the figures from your P60 or payslips.

One top tip is to register as soon as you start working, both as a sole trader and to do your taxes online. It takes about a month to do the latter as they send you a letter with login details, so you don't want to leave it till the last minute.

jwac

That's really helpful thank you.

In terms of the timeframe to get started then, would I have to be registered as a sole trader before I accepted the work? Or is it possible to register straight after/during?

ElefantEd

I think you have a month to register - but this is just a vague memory. There's no reason not to register, except that in the event that you don't get the work, you'll have awasted your time and may have to unregister in order to avoid having to waste further time filling in a form later on saying that you didn't earn anything!

rustywallet

I hope this helps.

I have 4 jobs. I keep a spreadsheet for my self employed work basically 'money earned' and 'expenses' (for me mainly travel @45p a mile).

When I log in to the online self assessment (to file a tax return) I use those figures when prompted (money earned and expenses) and when asked about employment I use the figures from my P60.

Over the years if I got confused about anything I just phoned up the self assessment people at the tax office and they have been really helpful. I've not contacted them for a while, hopefully they are easy to get hold of!

Slinky

Seeing you mention this is work offered by a former work colleague, do your current employers have any issue with you working freelance? Would this be a competitor of your current employer? Is there anything in your contract to prevent you taking on external work?

JayWalker

Slinky wrote: »

Seeing you mention this is work offered by a former work colleague, do your current employers have any issue with you working freelance? Would this be a competitor of your current employer? Is there anything in your contract to prevent you taking on external work?

This is a very important point. If you can, get a letter from an authority figure saying they're happy for you to make money from your hobby. Just in case. Good luck!

scaredofdebt

Another tip is to put some of the money aside when you get paid, ie 20% so you have the money ready to pay the tax.