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Self-employment

The decision to become self employed can be a difficult one. You need certain key skills and attributes to be successful in self employment. This guide provides information on whether working as a freelancer is for you, how to deal with tax and NI issues and finding work.

When you are self-employed you are your own boss and this has advantages as well as disadvantages. Working for yourself allows you to choose your working hours and the types of assignments that you work on, as well as being able to direct the focus of your work yourself.

The people who worked for themselves in the Create a job videos were very clear that, in order to be successful, you have to have drive, take personal responsibility for your actions, be able to develop relationships with people and be very self-confident. Above all you have to convey a sense of professionalism and trustworthiness. Clients have to be sure that you are up to the job and will deliver what you have been contracted to do.

Each year, more and more people are becoming self-employed. For people working in the creative sector, freelancing has always been the way forward, lining up the next assignment whilst completing the one in hand. As a freelancer, you would be promoting yourself as the purveyor of a specific skill set, or as offering a niche product. Skilled web designers, sports coaches and therapists are examples of professionals who are often registered as self-employed. They may work out of a business centre that promotes their services but essentially they are working independently as sole traders.

Details on how to set up as a freelance worker/sole trader can be found on the Her Majesty’s Revenue and Customs (HMRC) website. Included on the site is a useful booklet, ‘Thinking of working for yourself?’ It covers how to get things moving, where to get help and how to register for tax purposes.

Is working as a freelancer for you?

In your particular field you may have no option but to work for yourself. For others, these are some important considerations before opting for this route:

  • Do you have the ability to get on with people and quickly build rapport?
  • Are you prepared to sell yourself and your skills to potential clients?
  • Do you have the confidence to approach people to establish new contacts?
  • Are you prepared to travel?
  • Are you prepared to deal with your National Insurance and Income Tax and returns?
  • Are you able to motivate yourself when working in isolation without colleagues?
  • Are you able to communicate effectively and negotiate with a range of people to ascertain their requirements?
  • Can you work from home without being distracted?
  • Are you disciplined?
  • Are you prepared to work very long hours when there is work to offset the less busy times?

Dealing with NI and tax

One of the things that many freelancers find tedious is running the administrative side of their business in relation to tax compliance. The surge in freelance working has seen the growth of companies who, for a fee, will deal with all of your tax issues and personal indemnity insurance, offering what is known as an umbrella solution. Several companies offer this service.

The other option is to keep your own records and hire and accountant or do your online tax return.

NB. It is important to seek advice from tax experts as every freelancer has different circumstances.

You are not alone!

There is a professional association that champions freelance workers. PCG is an independent, not-for-profit organisation whose membership stood at 20,000 at the beginning of 2010. It campaigns on behalf of freelance workers and has lots of useful information on its website. It produces a magazine for which there is currently a free 12 months’ subscription.

PCG: The voice of freelancing

Finding work

Building up a client-base is essential but, as with any job, you need to get your first foot on the ladder. Having your own website to which you can refer potential clients, is a starting point.

The internet is a vital tool in promoting yourself and sourcing work. There are sites that promote specific sectors and others that are more generic. Some sites enable you to promote your individual skills and CV; having a link from these to your personal website would help attract business.

Once you have accomplished your first assignment satisfactorily you will find that personal recommendation is the best way to grow your list of contacts. Taking testimonials from satisfied customers that you can use in your marketing materials is highly recommended.

  • Freelance:UK - a site that focuses on creative freelancers - lots of useful advice and forums.
  • FreelanceXchange - a site that has a variety of projects and jobs posted.
  • Freelance Switch - includes a freelance directory and has compiled a list of freelance sites that is regularly updated.