Why Freelancing? Infographic

The

of becoming a

Freelancer

Why, What,How & Where

Taking the plunge and opting to become a freelancer is an exciting yet daunting career choice, so here's some advice to help ensure everything runs smoothly and successfully.

Why become a freelancer?

To achieve a better work/life balance

To escape the 9-5 routine

To be in control of your workload and productivity levels

Extract your income

efficiently

Deciding to become your own boss is the first step, next you have to choose whether you will operate as a Limited Company, Sole Trader or use an Umbrella Company.

How will you operate?

To boost your net income

£To claim business expenses

Sources

Boox Contracting Guide: http://www.boox.co.uk/contractor-limited-company/

Sole Trader

Simple to register

All the profits are yours

You are liable for your firm's debts

No registration fees

File selfassessment return

Savings and assets such as your

home are at risk

Not essential to have an accountant

but advisable

Profits taxed as income

Pay class 4national insurance

on profits

Pay class 2national insurance

UmbrellaCompany

These include tax and National

Insurance contributions on a

Pay As You Earn (PAYE) basis

Setting upin this way is

quick and easy

You pay the umbrella a fee each time you

are paid

Payments haveto go through a

third party before they get to you

Take home payis between 67-76%

the value ofyour contract

Control is inthe Umbrella

Company's hands, you are reliant

on them to collectyour money

You become an employee of an

umbrella company

Your servicesare contracted

out by them

The company will invoice your

client directly

You will be paidby the umbrella company oncethe necessary

deductions have been made

Limited Company

Register with Companies House

More rules & paperwork

Profits relate to the company

File self assessment return

for director(s)

Need Profit & loss account, balance sheet and notes

Pay corporation tax return online

SUBMIT

Submit corporation tax return online

Pay class 1national insurance

on any salary

Liable for amount of share capital

Take income as salary, dividends and reimbursed

of expenses

Share ownership of the company and dividend income with your spouse

Make more of your profits through

better tax planning

Vs Vs

Become a freelancer in 5 easy steps

Learn about IR35

See our guide for more in-depth advice and information on

beginning your career as a contractor.

Set up your Limited Company and bank account

Take the hassle out of your finances with an

online accountant

Choose how to operate

Find work

What are the key things to consider?

Moving from permanent employment to contracting means you have to:

Plan for sickness

File annual accounts at Companies House

Submit your own personal tax returns

Chase payments

Submit Corporation tax, VAT and PAYE returns

Register your business

Plan for holidaysFor Limited Companies