Becoming a freelancer for the first time is both liberating and slightly overwhelming. But, I will admit, the benefits of being your own boss are enormous and so worth it. It really is amazing, getting to be in complete control of your own schedule and getting to be being in complete control of your income.
I’ve been a work at home, freelancing Mum for nearly five years now and I honestly would not change my situation for the world.
However, I do know first hand that being a freelancer, regardless of the benefits, can also be super scary! Becoming a freelancer, no matter what your niche, means you are now not just responsible for your ‘craft’ but you also need to know and hone other skills such as; how to pitch and how to deal with finances, as well as suddenly having to be super aware of all the legal aspects of being self-employed.
Although there are so many benefits of being a freelancer, one thing I find a lot of people are most scared about is being in charge of the financial and legal side of freelancing. I will admit I was definitely one of those people for at least the first couple of years of my freelancing journey but, luckily, I have learnt a lot of legal tips and tricks along the way that I’m going to share with you today.
Here’s our 5 legal tips for freelancers:
1. Use Contracts
This may sound completely obvious to some, but make sure you use contracts. Setting out legal agreements with whoever you are doing work with, completely covers your back should something go wrong.
My first major freelancing job was working as an ongoing white label (a sort of ghostwriter) for a social media company. As it was my first role, I wanted to get a feel for freelancing, before I got tied into a contract. This was a big mistake.
One day (payday), the company turned around to tell me that they couldn’t pay me due to a large bill they had come out. I was told I’d have to wait for a while till they got more funds through. I didn’t really have much of a leg to stand on without a contract. If this does ever happen to you though, please know that any e-mail correspondence between you can act as a ‘paper trail’ and will help you if you need to ‘take action’.
2. Register As Self-Employed
If you live in the UK, it takes minutes to register as self-employed online and it is so important to do so. I know lots of people who have put this off because they’re found it overwhelming, but the process is really simple once you sit down to do it. Remember, you legally must declare your work, even if it is a side hustle and putting off registering could end up being really costly to you. Read more registering in my post 5 Tips For New Freelancers.
3. Keep Track Of Your Income And Expenses
At the end of every year you need to complete a tax return. Some people keep a track of their income and expenses by using excel or numbers. Some prefer old fashioned pen and paper. Whichever method you choose, it is important to keep hold of these figures, to make it easier when it comes to filling in those forms.
4. Pay Your Taxes!
Don’t forget to set aside some money every month to pay tax and national insurance. Don’t let these be unexpected costs at the end of the year, because you could be in for a shock. I tend to take 20% of my earnings and put it aside every month for tax purposes. That way, I know I have enough to pay my tax, and anything left over is a lovely bonus.
5. Talk To A Lawyer Or An Accountant
If you are unsure about anything, speak to a professional. Trying to do things off your own back and guessing, could lead you into some deep dodo. It doesn’t hurt to seek legal advice from a solicitor for small businesses and freelancers, even for the simplest of things. It’s wise to seek legal advice anyway, especially if you’re just starting out as freelancer.
If you liked this post, be sure to check out my post 5 Places New Freelancers Can Find Work.
Have you every had any legal issues when it comes to freelancing? Is there anything else you’d add to this list? Let us know in the comments below.