Freelance Survival – Masterclass

It was an essential part of my project to undertake research in how a freelancing business would operate, as it is relevant to the ‘business’ myself and Ben are promoting and directly relates to learning outcome 4. It would also be naïve to ignore the business side of the project, as it may be directly relevant to my future working in audio, as many people in the media sector go on to be freelancers. There is also the fact that there are 1.4 million British freelancers working across all sectors in the UK.

I attended the ‘Freelance Survival’ Masterclass by Jack Shelbourne. The class was very useful and informative on paperwork, getting paid, accounting, VAT, tax, social media and other freelancing tips and tricks. Essentially, freelancing is being self employed, meaning you are in charge of finding and creating your own work, and running your business yourself. The master class gave the following advice.

Starting up – It is important to have money saved up due to illness, having no work or not being paid.

Paperwork – Keep all receipts (travel, petrol, equipment etc.) to claim back against tax. However, do not keep them for large group meals, alcohol and holidays, as these will not be reclaimable. Jack advised to think of kit as an employee, would you keep an employee that sits on the shelf for six months? If not, you sell the kit to raise funds.

Jack spoke about how a verbal agreement (on the phone) is not legally binding, you need proof for an agreement. Always follow up everything with an email or in writing. He also suggested creating a ‘confirmation form’ which will include all information of the agreement, outline all expenses, length and full cost of the job. This way it is easier to legally secure work.

Have your client pay for your kit – This can be done from including the price of your kit in the fee for the job or getting them to directly hire equipment.

Working out your fee – Jack had the same advice as Lee, that you should value your work when pricing it. Keep up with the standard pricing, don’t undersell yourself as ‘cheap suggests cheap’. Always chase up late payments, as no job is worth late payment.

In terms of graduate fees, maybe offer a lower price for your first job/year. Always state your full cost, and if giving discounts put it on your invoice (discount to the agreed price). Discount in percentages and always let your customer know much you are cutting for them. Jack also suggested that if you are going to raise your prices, do it little and often. Also to have two prices, one with and one without kit.

Accounting – Have a business and personal account. Find a 0% interest credit card and change it when the interest runs out. If you do not have a sufficient amount of back up money then credit cards can be used to buy equipment.

If you need it, seek professional advice/protection regarding accounting, tax, legal advice, unions and insurance, as public liability insurance is essential. Accountants will look after your finances, and pay for themselves as they look after your money (until you can learn or do it yourself). They however can be quite expensive, so there are other online services that can give you advice on your accounts.

Bookkeepers are great for organising your end of year tax, make sure they are qualified and know the sector you work in. You can give them all your receipts, as they decide what is correct for tax. They will do your tax return, and then you just have to check and sign the document. They also help with VAT.

VAT – Value Added Tax is a must if you earn at least £81 000 a year. You claim back your VAT. You are more expensive to non-VAT registered clients, as you are essentially costing them 20% more. VAT is great for commercial and corporate work. Purchases are registered for the past four years.

Tax – You are taxed on roughly 20% of your earnings. Some types of tax include; income tax, national insurance and student loans. Jack suggested having a third account for tax saving (you can speak to your accountant or the bank about this). This would be used so that 20% of your income automatically transfers to this account when you are paid.

It is illegal not to pay tax, however it is easy to pay. If you do not pay HMRC will look for you. There is a £100 fine for not filling in a tax return form, and you are charged interest on any owed amount. Online tax return is paid in January, the normal tax year happens from April to April.

Tax advice – Your first £10 000 is tax-free. If you earn up to £31, 865 (£41, 865) you are charged 20% tax, anything above is charged at 40%.

Brand yourself – Showcase works and express opinions/ideas on social media sites such as Twitter, YouTube, Vimeo. Make sure social media pages are professional. Websites are quite cheap to buy, roughly £2.50 (.co.uk) and £10 (.com) annually. On the other hand you can blog for free. Websites are a great for advertising, Jack suggested getting others to write about your work (testimonials).

Contacts – Make good contacts with people as a lot of the time, work comes through recommendations. You should also look to write articles, enter competitions, tweet about work and hand out business cards.

Getting paid – Make sure to send your invoice immediately when the job is done, and state your payment terms (usually within 30 days). On invoices ask to include PO number, date the last day of the job (for payment within agreed time) and include client discount.

 If the client still isn’t paying then chase them up with emails on phone calls. You can reissue the invoice and can legally charge £40 extra for the job if this happens. Make sure you keep a record of all calls and paperwork. If the client still does not pay after this, they may be breaking the late payments of commercial debts (interest) act 1998. If so, reissue your invoice and you can charge interest of 8%.

 

References

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