Making the Transition - Moving from Permanent to Contracting
Making the switch from a secure, permanent position to the world of contracting is a big step, and one that…
If you’re considering making the move to a career in Freelancing – Here are some points to consider.
There are many reasons why you might decide to go freelance, from commitments at home to being your own boss to wanting to earn some extra money alongside your current work. Whatever your reasons, here are a few things that are worth considering:
Do you want to be a Sole Trader or Limited company?
Before working you must decide whether you want to work for yourself or set up a company. It may be worth meeting up with an accountant to run through the pros and cons of each before you make a decision. You can register as self-employed through the HMRC online.
How much will you charge for your services?
You will need to be earning enough to cover a number of things, your average cost of living, taxes, your monthly overhead (e.g. office supplies, admin, insurance or rent) as well as making a profit for future growth.
Try using an hourly rate calculator, such as this one from Freelance Switch for a rough estimate.
How will you manage your finances?
Going freelance means that you will need to keep a close eye on managing your finances. Not just for tax purposes, but this can help you track whether or not you are making any profit and if your business is growing.
Opening up a business account can help you track all of your finances and make your self-assessment easier at the end of the tax year. You may also want to hire an accountant to help you with this as well.
Have you got a back up plan?
Going freelance often means there is less support if something goes wrong. Whether it’s an accident at work or just a slow month for business, saving a percentage of your earnings each month can ensure you have some money to fall back on in case of emergencies.
Investing in a freelance insurance package can also help save you money in the long term. Take a look at our website for more information about the types of cover available.
Here are some useful sites for advice when becoming freelance:
