| The recent UK recession has resulted in more and | | | | distribute your time between work and leisure |
| more people turning, either voluntarily or by necessity | | | | however you wish is priceless. |
| following redundancy, to freelancing. Not all business | | | | The cons (disadvantages) of being a freelancer are: |
| sectors use freelancers to the same extent, so if you | | | | lack of job security; continuous change; you have to |
| are not a computer consultant, web designer, graphic | | | | run all aspects of your business; isolation; and new tax |
| designer, copywriter, illustrator, photographer or | | | | legislation. |
| journalist you may find it quite hard to get work. | | | | Freelancers have very little job security. They are not |
| However, the use of freelancers is becoming more | | | | guaranteed continuous work and do not receive |
| common and, ironically, many people freelance for a | | | | benefits such as sick pay and maternity or paternity |
| former employer even after being made redundant. | | | | pay from their customers. Some state benefits may |
| Freelancing involves working under contract for a | | | | be receivable, however, if the freelancer is an |
| customer; you will either be self-employed or an | | | | employee of their own, or a shared, service company. |
| employee of a service company. In legal, tax and | | | | Freelancers may move from contract to contract |
| practical terms, freelancing is very different from being | | | | frequently. Many find this quite disruptive. To be |
| an employee. In the UK, there is a mid-way category, | | | | successful you need to be able to adapt to new |
| the agency worker. Such workers gained rights similar | | | | situations rapidly. |
| to employees recently, but most true freelancers will | | | | Being a freelancer means setting up and running a |
| not fall into this category. | | | | business and all that that involves. There are a number |
| There are pros and cons to being a freelancer; | | | | of possible business structures in the UK that a |
| weighing the two against each other is difficult and the | | | | freelancer might consider, including: sole trader, |
| outcome varies from person to person. | | | | partnership, limited company, limited liability partnership |
| The pros (advantages) of being a freelancer are: | | | | (LLP) and umbrella company. The legislation that |
| more money; flexibility; variety; less tax; and better | | | | applies to the governance, statutory returns, tax rules, |
| "work-life balance". | | | | tax returns and financing differs for each structure and |
| Freelancers, in general, earn more than an employed | | | | sound professional advice is essential. |
| person doing the same job. Of course, there are good | | | | If you work from your home as a freelancer, you |
| reasons for this (see cons below) but it does mean | | | | have to work without the support of colleagues. You |
| that you do not have to work full-time. | | | | will not have access to, for example, the company |
| As a freelancer, you can choose who you work for | | | | library and technical department. |
| and frequently when, where and how you work. You | | | | Recently, the UK tax authority, HM Revenue & |
| have more control over your working life. However, | | | | Customs (HMRC), has attempted to clamp down on |
| when times are hard you may have to take whatever | | | | perceived abuses in the UK tax system. The |
| work and working conditions you can get. Of course, | | | | self-employed, and particularly freelancers, have borne |
| there is a limit to your flexibility - you will probably have | | | | the brunt of this attack, witness the 'IR35' and |
| to fit your holidays in between contracts. | | | | 'Managed Service Companies' legislation and the |
| Good freelancers can choose to work on a range of | | | | 'Arctic Systems' case (that HMRC took all the way to |
| projects for a variety of customers, giving opportunities | | | | the House of Lords, and lost). Further clampdowns are |
| to utilise and build upon their skills. | | | | expected, despite the Government's promise to |
| The general perception is that UK self-employed | | | | reduce "red tape" for business. |
| people (including freelancers) pay less tax than | | | | From the above, it may seem that the balance is tilted |
| employed people do. Although, this is largely true, there | | | | firmly in the direction of the 'cons'. However, you can |
| are legitimate reasons for it, including the fact that the | | | | outsource much of the legal, accounting, tax and |
| tax rules for "deductable" expenses are more | | | | administration to a management company or firm of |
| generous for the self-employed than for the employed. | | | | accountants and you can even employ an agent to |
| However, "work-life balance" is frequently given as the | | | | assist in your search for freelance work. If you do this, |
| most important advantage of being a freelancer. Many | | | | you will probably find that the decision is obvious to |
| argue that in this day and age the freedom to | | | | you; you are either a freelancer or you are not. |