Becoming self employed is the right choice for many people, but things can become difficult if you don’t know the ins and outs of what it actually entails.
If you’re ill-informed about what is required of you, chances are you’ll soon find you’ve hit a bump in the road.
Like any industry, there common mistakes that can easily be made but there are also easy ways to avoid them.
Here are a few faux-pas’ we’ve noticed freelancers often make.
Poor records
Just because you might not have anyone working under you when you become a self employed, you need to remember that you are still running a business and, therefore, still have responsibilities.
To ensure everything is running as it should, you need to have comprehensive information. This will help you make proper business decisions and will ensure you have all the details you need when it comes to paying taxes.
Make sure you note down all your expenses and income, the amount of time that it takes to complete a project and any other important details. This will also help you create estimates for future jobs, which is especially important if you are operating as a limited company or sole trader.
Lack of tax understanding
The UK tax system can be complicated for the self employed, with self-assessment, IR35 and PAYE to contend with. While an umbrella company will take care of this for you, it is crucial to understand what is going out and when.
If you’re confused about what taxes you are subject to, don’t delay in speaking to an accountant. Meeting payments is important to your business and your bottom line, so be sure to engage with a good accountant and get the help you need straight from the moment you decide to become a self employed.
Failing to meet deadlines
There is a constant demand for contractors and freelancers, so it can be stressful to see a full schedule lain in front of you. However, you are still under obligations to meet deadlines and complete tasks in the same way you would if you had a direct boss.
It is important to really hone your time management skills to ensure you have enough space in your calendar to get things done.
If you’re struggling to meet a target, try to negotiate a new deadline or outsource. Similarly, turn work down if you suspect things will run a bit too tight.
Meanwhile, you also need to ensure you’re contactable. Answer queries in a timely and efficient manner to keep clients happy and give yourself a reputational boost.
Not using a contract
A business would never employ someone or enter into a deal without a contract. This sets out terms, conditions and responsibilities clearly to satisfy both parties and ensure fairness.
However, some contractors and freelancers still enter into a job without a contract – ironic really. Ensuring there is an agreement in place for each job you do will ensure you aren’t being mistreated and set down clear guidelines to govern your interaction with a client.
This document also gives both you and an employer something to refer back to if something goes wrong.
How Brookson can help…
If you are thinking about becoming self employed, either as a freelancer or contractor we are here to help.
Whether it is helping you to decide the best way of working, providing expert advice, helping you manage your business finances, or guiding you through the compliance maze, we are here to help you at every stage of your self employment journey.
Call us today on 0800 230 0213 or request a callback for free and friendly advice.
I am a chartered tax advisor with a specialism in the freelance contractor sector advising contractors on how to structure their affairs and recruitment businesses and end hirers on the effective…
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