Freelancing

Neli Banat Second Wednesday

Who we are

• Specialist recruitment agency for creative industry in East Midlands

• Permanent and freelance jobs• Over 30 years combined experience

of working within creative agencies• Established for over 12 years

About me

• Branding agency in London• Senior Project Manager at Linney

Design• Digital and print projects• Ex-client, worst of a kind

Freelancing

• Who is a freelancer?• Full-time or ad-hoc?• Why are you freelancing?• How do you get work?• Paid by hour or per project?

What’s in it for you?

• Being your own boss• More money • Freedom• Variety

What’s in it for clients?

• More flexible then permanent staff• Less commitment – easier to hire and

fire • Extra skills• They can save money (no sick pay,

holiday pay, redundancy pay and employer's national insurance)

What skills are best?

• Some skills are not suitable for contracting (e.g. where the employer needs a stable workforce and the customer expects to deal with the same member of staff each time)

• Being an artworker is often better than being an account manager (unless it’s per-project, longer term)

Disadvantages

• Less security – freelancers are not protected in the same way as employees

• Uncertainty – where is the next job coming from and when?

• Hassle - there will be forms to fill in, rules to obey and accounts to keep

• No pay when ill or on holiday

What makes a good freelancer?You think you are good at what you do, right?

Being competent only accounts for 10% of the overall success of a freelance career

The image that you convey as a professional actually counts more: 30%

The remaining 60% is to do with exposure. This is where Kelso Jones comes in. Over 450 clients! Market knowledge, diary database

Successful freelancer

• Knows what they want to achieve from being in business. Has thoroughly thought through the financial implications of going it alone

• Is decisive. Now that you are your own boss it will be down to you to make the decisions to ensure your business is a success. Nobody else will ensure important forms are filled in or that clients are chased for overdue payments

• Is self-motivated. If you have been used to having a boss breathing down your neck this may be harder than you think

Successful freelancer

• Has the ability to go from site to site, adapting to the different conditions, the different tools, the different culture, and the different ways of working

• Has the ability to get on with other people and make new working relationships easily

• Listens and obeys!• Leaves personal opinion at the door • Is willing to brush up on existing skills

Reputation

• The successful freelancer will have such a good reputation for his work, and have such a good rapport with his clients that his various contracts are renewed whenever possible

• One of our freelancers has been working with the same company every week since June 09 and we have just confirmed his booking until next June

Self-employed/LTD/umbrella

• A sole trader is defined as a business that is owned and controlled by one person who takes all the decisions, responsibility and profits from the business

• The vast majority of contractors and freelancers work through their own limited company. A limited company is a distinct legal entity in its own right 

• The freelancer is regarded as an employee of the Umbrella and their main purpose is to make life simple for freelancers while maximising their earnings

Self employed - advantages

• Easy, register as self-employed with HM Revenue & Customs (HMRC)

• Do monthly accounts, annual tax return.

• You don't have the administrative or legal responsibilities of limited companies

• Business expenses, and all losses, can be off-set against tax

Self employed - disadvantages• You are personally liable for any debts you

incur in the running of your business, including law suits

• If you win work via an agency, and the agency is responsible for remunerating you, they must by law pay you as an employee, which is not tax efficient

• Clients can be wary of engaging freelancers who are sole traders because if you are 'deemed employed' they would suffer the financial consequences

Limited - advantages

• Your company is a separate legal entity, so your personal assets, such as your home, are protected 

• It can boost credibility amongst clients. • Business expenses and losses can be off-

set against tax • You can control how you combine salary

and dividends to pay yourself. In many cases a limited company can be the most tax efficient

Limited - disadvantages

• You have legal responsibilities as the director of a company 

• There is more admin and higher cost in running the company due to obligations, such as submitting company accounts

• You can still be 'deemed employed' if your relationship with your client resembles employer/employee, but your company will suffer the financial consequences

Umbrella - advantages

• You are handing over the responsibilities, admin and hassle to an Umbrella company who bills your client through its own limited company structure and pays you a salary based on the work you do for your clients

• The fact that you are paid a salary and effectively have employee status helps with proof of earnings for loans 

Umbrella - disadvantages

• It’s not your own company and therefore it’s harder to build your own brand

• It’s not tax efficient because all the money is paid as employment income

• Some rogues out there – choose carefully

Thank you

Any questions?