Going Freelance (web design) while I look for work?

torN

torN

torN

Associate
Joined
18 Nov 2005
Posts
561
Hey guys,

Basically im nearly 2 months out of uni and looking for work in the field of web, graphic and interactive design. However as we all know job searching is easy, it just getting the replies. Anyway im derailing myself here, I want to pickup some freelance work while im job hunting, Ive found some sites for freelancers so its no big deal. however what im struggling (honestly, dont laugh) to find out is, do i claim myself as a sole-trader for tax purposes? Do I need to invoice for every peice of work I do? Methods of payment?, I have no idea how to go about this.

If i start a business, for example Today and a job ive applied for 2 weeks ago emails me saying congrats you got the job :rolleyes: what happens, where do i stand? How do I go about becoming a Freelance web designer?


Yes i have a portfolio and a lot of work on there already. :D


Cheers
 
torN said:
[...] However what im struggling (honestly, dont laugh) to find out is, do i claim myself as a sole-trader for tax purposes? Do I need to invoice for every peice of work I do? Methods of payment?, I have no idea how to go about this.[...]
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The info here may be some help. I'm not endorsing the company, but the information appears sound.

I don't think you'll find many laughing at your basic business questions :) I'll be amazed if there are any graphic designers with business knowledge coming from uni. Don't get me started on the whole "Why the hell are universities sending design graduates out into the real world without any business knowledge whatsoever?!" subject...

One thing that I found invaluable was a good online accounting/invoicing web service. I plumped for Freshbooks, but there are others.

If i start a business, for example Today and a job ive applied for 2 weeks ago emails me saying congrats you got the job :rolleyes: what happens, where do i stand? How do I go about becoming a Freelance web designer?
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As long as all your freelance transactions are recorded somehow, and declared to HMRC at some point, you'll be fine. I've found HMRC to be very helpful in this regard - drop them a line and they'll be able to advise you better than anyone on here.

Yes i have a portfolio and a lot of work on there already. :D
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Excellent! Try hawking your portfolio around local design agencies - a lot of them have a pool of freelancers they can call on at busy times.

If there's one important piece of advice I can give, it's this: Don't undersell yourself. It's the number one mistake among fledgling freelance designers, and it leads to unhappiness when somebody points out that due to long hours and low fixed fee, you've been earning less per hour than you would have at McDonalds. Remember that you have specialist skills that you've had to pay handsomely to acquire, and price accordingly.

Oh, and don't be tempted to base your rates on undercutting the competition. Low prices attract bad clients.

Good luck :)
 
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simisker said:
I don't think you'll find many laughing at your basic business questions :) I'll be amazed if there are any graphic designers with business knowledge coming from uni. Don't get me started on the whole "Why the hell are universities sending design graduates out into the real world without any business knowledge whatsoever?!" subject...
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I even asked this question myself while I was at uni, we had a (what i believe still to this day) dumb project that really didnt help or interest any of us on the course, the project was to make a video using our "skills" that shows our interpretation of a poem we were given. I felt this was a massive waste of time, no one gave a rats ass (this was a graphics for interactive media course and we were all in our 3rd year). A crash course in javascript or how to become a freelancer would have been far far better. But no.



Enough of the rant, thanks very much for the info you've given me!
 
Might be worth asking if you can work for free at local design agencies, and carry on trying the freelance option. At least that way you get some expericance, contacts, business knowledge.
 
I am a sole trader registered for tax and all that, my advice is don't register. You're not going to earn enough to get into the tax threshold are you? They attempt prosecution if you owe them over £100 apparantly.

Although you're not covered by NI, so there is a risk there. Not sure what the fines are.
 
one call to hmrc to register is all it takes. just do it what's the harm? you pay tax after the work so if you don't earn enough to pay tax you're fine, if you do you're fine. if you don't tell them then earn enough you're in a small amount of trouble.
 
Try being a sole-trader and employed full time at the same time. I've aged about 2 years in the last few months.
 
Does anyone know what the tax legality is on being paid in kind for freelance services? I've been doing some web dev work for a small company that I'm a client of and I am paid in kind for it as it's mutually beneficial.
 
cheers for the replies peeps. Im currently in the middle of a re-design of my portfolio, so after that is done I will just look for little jobs freelance wise.
 
torN said:
Hey guys,

Basically im nearly 2 months out of uni and looking for work in the field of web, graphic and interactive design. However as we all know job searching is easy, it just getting the replies. Anyway im derailing myself here, I want to pickup some freelance work while im job hunting, Ive found some sites for freelancers so its no big deal. however what im struggling (honestly, dont laugh) to find out is, do i claim myself as a sole-trader for tax purposes? Do I need to invoice for every peice of work I do? Methods of payment?, I have no idea how to go about this.
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I've been self employed since I was 17. Register with HMRC as Self Employed. You need to keep accounts of income and expenditure, and receipts for items you're claiming (such as travel and equipment) and use this in your tax return at the end of the year. You will need to produce an invoice for each payment, as this creates a paper trail in-case your tax return gets checked/audited.

If i start a business, for example Today and a job ive applied for 2 weeks ago emails me saying congrats you got the job :rolleyes: what happens, where do i stand?
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Just make sure you document all income and expenditure during your self employment, and you'll need to fill in a tax return at the end of the year, about your self employed income. Ring up the tax office if you're unsure. They're very, very helpful.
 
I've been in full time employment and also self-employed for a couple of years now, and registered as such with HMRC. I endorse most of the advice in this thread, in terms of record keeping and paperwork.

You'll find the paperwork isn't bad; it can be a simple spreadsheet which records the jobs you're doing as you go. It doesn't have to be some massively complex system. For invoices, I set myself up a little Word template that I just fill in once I need to invoice something, then I save it in a folder structure ordered by year. I print off a hard-copy also and file it away. For expenditures, I just record the purchase in my spreadsheet and box up the receipts. I also have my business folder synced to the cloud in case something goes awry.

The paperwork is useful to protect yourself - one of your clients may be audited and if there's a paper trail which leads back to you, and you've been doing something shady, you might be in a spot of trouble.

Two things I can add to the thread though:

1) Set yourself up a separate bank account (a simple savings account will do, doesn't need to be a business one) and get your clients to pay directly into this account (I put the account no. and sort code on my invoices). This keeps your business money separate from your personal money and it's easier to track when someone has paid.

2) If you think you'll earn less than £5,315 in a year from your freelance work only, you can apply for exemption from Class 2 National Insurance contributions (source). This won't apply if you're doing this full-time as you're more than likely to earn over the threshold, but worth mentioning as it might apply to others.

Good luck with your freelancing!
 
And don't forget to log your car mileage when going to see clients. It's handy to keep a little book and just record it. I think current rate is 45p a mile. The other way of working out engine size and stuff is far too complicated.
 
Hey torN,

You should register with HMRC as self employed, you will have to fill in a tax return at the end of the year for all your incoming and outgoings - http://www.hmrc.gov.uk/forms/cwf1.pdf

Just keep any receipts for web hosting, domain names, fonts or anything you buy for your jobs (even computers, monitors, printers and nice swirly chairs can be claimed as an expense!) At the end of the year you will have to pay tax on any money that you have made in profit. For example, clients payed you a total of £8,000 over the year, you spent £3,000 on expenses and you would be liable for tax on the remaining £5,000 which you would have course spent! =D


Anyway, Hope that helps you out
 
So, when dealing with taxation, you are saying that the aim of the game is to show near-zero profit, but attaching as many expenses as a business expense, against the business.

My question: how far can you go?

For example, lets say that I goto a restaurant. I meet a client and we have a business lunch. Can I claim this as a business expense?

There must be a limit...I mean surely I couldn't buy a condom and claim that as a business expense, with the excuse that an important client needed to be serviced before they would give me the contract...?
 
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