A second job - freelance web design

elDeeJay

I’m thinking of supplementing my income by doing a bit of web design as a second job. I work full time (and have cleared this with the company!) and wondered what implications this will have on my tax situation. I know I need to register for VAT, but what else is involved? I guess I will have to fill in a yearly tax return then – is this something that is straight forward and I can do myself or would I be best off hiring an accountant? I don’t anticipate making mega-bucks from this – just a few quid here and there; but want to know what is involved, not just from a tax perspective, but anything additional from adding a second income/job that I may not have thought about….


Thanks

geordie_joe

I have nothing to add about a second job, but web design is a hard business to get into.

Every 15 year old kid who has used a free web template to build a web site has set them selves up as a web designer. Just saying you are a web designer is not enough, you will need a good portfolio of your past work.

Telling a potential customer that you are good will not do, you will have to show them how good you are with examples of your work.

Then there is the "getting paid" part. What will you do when you send work to the client and they refuse to pay for it, but still use it.

A client won't pay you until you've given them the finished work, and once you've done that they don't need to pay you.

richt71

elDeeJay wrote: »

I’m thinking of supplementing my income by doing a bit of web design as a second job. I work full time (and have cleared this with the company!) and wondered what implications this will have on my tax situation. I know I need to register for VAT, but what else is involved? I guess I will have to fill in a yearly tax return then – is this something that is straight forward and I can do myself or would I be best off hiring an accountant? I don’t anticipate making mega-bucks from this – just a few quid here and there; but want to know what is involved, not just from a tax perspective, but anything additional from adding a second income/job that I may not have thought about….


Thanks

I'd highly recommend going and seeing an accountant - most will give you a free first consultation anyway. It needs to be structured right otherwise you might lose most or all your extra income to the tax man depending on your wage from your day job.

briona

Hi elDeeJay

Firstly I don't think you HAVE to register for VAT – I believe you only register if you are going to earn above whatever the threshold is (and for a few websites, unless you're charging thousands, I don't think you'll go over). Obviously NOT being registered for VAT means that you can't claim any VAT back on anything you buy for your business like a new laptop for example... For more info see the link below.

http://www.hmrc.gov.uk/

Personally my concerns on working two jobs would revolve more around whether you could sit at a computer all day in work and then come home and do the same all evening (of course if you're not working in an office this may not be a problem!). And what about meeting client deadlines? I know that after a day in the office, the last thing I want to do is structure my free time in the same way...

The other obvious concern is where you would get your client base from. I'm a Graphic Designer, so for your business would already have a client base (though obviously would be in breach of my contract if I tried to use it for personal gain!)... As the previous poster said, so many people can and do build their own websites that it might be a tough market to enter.

I would start by building yourself a website (thereby showcasing your talents). Customer testimonials are always good so perhaps you could do a website for a friend and get them to give you a quote?! Then I'd see if you can get a listing as a web designer somewhere – either by paying someone to ensure you appear high up in the Google search listings, or through Yell.com.

That's my input! Good luck!

Briona

elDeeJay

Yes, im well aware of the cowboys purporting to be graphic designers and web developers when they have no skills at all (some of the work I see by so called web designers is shocking!). I have my own website and I've done some work already- either for free (to build a portfolio) or for non-profit organisations so I have a few examples of work people can look at. Now though I want to start charging for my efforts and hopefully the quality of work and service will speak for itself.

If I don’t register for VAT, what happens if a company asks for a VAT receipt though? Also, im anticipating that some clients may want ongoing maintenance. How will regular (for example monthly payments) impact things?

Im just speculating at the moment, so airing my thoughts (concerns?) on here.


Thanks

geordie_joe

elDeeJay wrote: »

Yes, im well aware of the cowboys purporting to be graphic designers and web developers when they have no skills at all (some of the work I see by so called web designers is shocking!).

I wasn't implying that you were a cowboy, just pointing out that there are a lot of them about. This makes it hard for the good ones to get business as they have to do a lot more to prove they are good.

elDeeJay

geordie_joe wrote: »

I wasn't implying that you were a cowboy, just pointing out that there are a lot of them about. This makes it hard for the good ones to get business as they have to do a lot more to prove they are good.

No offence taken, I didnt take it like that at all. Like yourself, it frustrates me the amount of REALLY shoddy work being passed off as professional web design - it frustrates me to hell if you look at the code for a site compiled by a so-called professional, and its blatantly ripped off somewhere else or built using MS Word etc. The sad thing is, most clients aren't tech-savvy and dont know good design from bad. As long as its a web site they're happy.

briona

elDeeJay wrote: »

Yes, im well aware of the cowboys purporting to be graphic designers and web developers when they have no skills at all (some of the work I see by so called web designers is shocking!). I have my own website and I've done some work already- either for free (to build a portfolio) or for non-profit organisations so I have a few examples of work people can look at. Now though I want to start charging for my efforts and hopefully the quality of work and service will speak for itself.

If I don’t register for VAT, what happens if a company asks for a VAT receipt though? Also, im anticipating that some clients may want ongoing maintenance. How will regular (for example monthly payments) impact things?

Im just speculating at the moment, so airing my thoughts (concerns?) on here.


Thanks

I think (though if anyone actually KNOWS, please feel free to correct me) that a company would only ask for a VAT receipt if you were charging them VAT. They would need the receipt so that when the VAT returns had to be done, the books balanced. If you're not registered for VAT then you can't charge it, therefore there's no need for a VAT receipt.

One option for people requiring ongoing maintenance is for them to pay you a retainer, possibly on a quarterly basis, for which you agree to provide them with X amount of hours of service per month... Of course you'd need to look at the tax implications of that and work out whether it's better to do that or to invoice as and when you've done the work.

Over and out!

Briona

elDeeJay

So its as simple as Dont charge VAT = no vat problems to deal with?
Cant be that simple can it?

shawry_99

I think you still effectively charge the VAT, but you dont seperate it out, as you dont need to pay the VAT man anything?

[Deleted User]

The tax office run free courses for the self-employed - I did them a few years ago and they were really good; they went into a lot of details about how to fill out tax returns, and what you can claim (keep all receipts; claim everything). By the way - I'm not numerate; if I could do this stuff, anyone can!

Remember, if you have clients visiting your home you'll need to check your home insurance - you may have to pay extra premiums.

Why don't you think about doing a couple of websites for free - for people you know - and then use those as your "experience" ? You can make them really nice (and maybe very different) and then point prospective clients in their direction to show how great you are (in addition to your own website) and for references? Also, look around at how much others are charging; don't start off charging too much. I would guess that a lot of your future work will come on recommendation from previous satisfied customers?

One final idea - try asking people you know who have already had websites designed for them, what worked, what didn't; what did the designer do that was helpful? What do they wish they had done differently? (I'll start - a charity I worked with paid a lot of money for a really "super-duper" website - it was wonderful - BUT they didn't have anyone to maintain it; they rely completely on volunteers. 6 months later it was no longer used. If they'd made do with a much simpler design, it would have been much better in the long run).