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We know what it’s like to be a freelancer, so here at Freelancer News we love keeping you up to date with all the latest news, tips and advice for freelancers. We cover tips on how to get work as a freelancer, economic news which may affect the way you work and the best way to handle your accounts and finance.

To make sure you’re always getting the latest news, we’ve gathered a team of writers with specific expertise and industry knowledge. That way you know that our writers can handle any aspect of freelancer life that you might need help with. Below are the latest articles from Stephanie.

Do UK Freelancers Pay Tax on Foreign Earnings?

As a freelancer, working for clients overseas is an appealing prospect. It opens doors to exciting new opportunities, extends your network, and means you’re not always up against the same competition time and time again.

Not to mention the travel potential – client meetings don’t sound so bad when they bookend a holiday abroad, right? It’s not all glamour and jet-setting though. With overseas clients comes the complication of communication across time zones and the tax implications.

Fortunately there are rules and regulations in place to ensure freelancers don’t paying tax in more than one place but as with most tax rules, you’ll need your wits about you.


In this article we’ll be covering:

  • What is classed as foreign earnings (foreign income)?
  • What a Statutory Residence Test is and why is it important to freelancers with clients overseas?
  • An explanation of your tax residence status and what this means
  • What to do if you’re taxed in more than one place


First, let’s clarify what falls under the umbrella of foreign income for UK freelancers.


What is classed as foreign earnings?

The Gov.uk website defines foreign income as: “anything from outside England, Scotland, Wales and Northern Ireland”, adding that “the Channel Islands and the Isle of Man are classed as foreign”.

So, as a freelancer working in the United Kingdom, any money you receive from sources outside of England, Scotland, Wales or Northern Ireland is classed as foreign earnings, as is any money received from the Channel Islands or the Isle of Man.


According to the UK government, foreign income encompasses any:

  • Wages from an overseas job
  • Foreign investment income (e.g. dividends or savings interest)
  • Rental income from property overseas
  • Overseas pensions


However, all we’re concerned about in this article is the income you’re generating from freelance work via clients in countries outside the UK.

Understanding how to pay the necessary income tax on these foreign earnings all comes down to your tax residence status – so now, let’s take a look at what this means in more detail.


What is a tax residence status?

In a nutshell, your tax residence status determines which country you should be paying income tax to. A UK freelancer, for example, will pay income tax to HM Revenue & Customs (HMRC).

Working out whether or not you need to pay tax on foreign income depends on your UK residence status. If you’re not classed as UK tax resident, you won’t typically be required to pay tax on foreign earnings.

However, if you are classed as UK resident, you will need to pay tax on your foreign income – unless your permanent home is overseas. To establish your tax residence status, you’ll need to take the Statutory Residence Test.


What is a Statutory Residence Test?

A Statutory Residence Test (SRT) determines what your residence status is, largely dictated by how many days of a UK tax year you spend in the country.


To be classified as UK resident you must either:

  • Spend 183 days or more in the UK during the tax year.
  • Have your only home in the UK (which you must have owned, rented or lived in for a minimum of 91 days and spent at least 30 days at during the tax year).


You will be classified as non-UK resident if you’ve either:

  • Spent less than 16 days in the UK (or 46 days if you have not been classed as UK resident for the three tax years prior).
  • Worked overseas full-time and have spent less than 91 days in the UK, of which you were working no more than 30.


If you think you are required to pay tax on foreign income, don’t worry because it couldn’t be any easier. You simply include it in your Self Assessment tax return to HMRC.

If you move in or out of the UK during the tax year, you’ll be covered by something called ‘split-year treatment’. This means you’ll only be pay income tax on foreign earnings during the time you were UK resident.

However, split-year treatment won’t apply if you’ve lived overseas for less than a full tax year before returning to the UK.


What happens if I’m taxed in more than one country?

As we mentioned earlier, there are preventative measures in place to stop you being taxed in more than one location. Should this situation arise, the problem can (very likely) be solved – so fear not!

If you find you have been taxed by the country where you’re being paid from as well as the UK government, you may be eligible to receive Foreign Tax Credit Relief (FTCR). FTCR will enable you to get all or some of your foreign tax back in the form of tax relief.

How much you’re able to claim back will depend on the parameters of the UK’s ‘double-taxation agreement’ with the country you’re being paid from.


Reasons why you might not get the full amount of foreign tax back are:

  • If a smaller amount is outlined in the country’s double-taxation agreement.
  • If you’re income would have been subject to a lower tax rate in the UK.


These are just the basics of FTCR and hopefully you won’t find yourself dealing with a double-tax scenario but if you do, head to the HMRC website where you’ll find a whole host of additional information to help you.

Ready to take your freelance expertise global? Good on you! We’re right behind you, cheering you on all the way! Find more guidance and advice for freelancers, from those in the know.

Perfecting Your Freelance Pitch on Talent Sites

As a freelancer, securing work is no linear process. Sometimes jobs trickle in while you anxiously twiddle your thumbs. At others, multiple clients contact you at once wanting work done immediately.

Sources of freelance work can be wildly diverse too. Some jobs come via word-of-mouth or courtesy of your trusty book of contacts. Others might be the result of scoping out professional media platforms such as LinkedIn.

Other potential sources of freelance work are talent sites like Fiverr, Upwork ,and PeoplePerHour – just to name a few of those that are currently popular. But to get the most out of that type of platform, you need to be pitch perfect. And no, we’re not talking about your dulcet tones to stay ahead of the competition and turn heads amongst prospective clients.

Using freelancer talent sites means that your profile needs to be the perfect pitch for every client:

  • Focusing on what your skills are, and what problems you can solve for clients, or needs you can fulfil.
  • Using faultless formatting, grammar, and clarity. Its YoUr FiRsT iMpRessionn!
  • Being honest about your experience, because lying to impress someone never impresses anyone.
  • Being truthful about any gaps in skills or experience you might have.
  • Including other skills which compliment your portfolio.
  • Keeping your online profiles professional, and up to date.


Six ways to fine-tune your freelance pitch for talent sites

Now, let’s take a look at each of these in more detail so you can become a pitching pro.


1. Talk less about yourself and more about the client

This might seem odd, considering it’s your pitch about your work. But, realistically, all the client wants to know is how you’re going to solve their problem, and how fast you can do it.

Naturally, they’re going to want to see you’ve got the skills and experience to fit the bill, but you’ll have greater appeal if you position this as a solution designed for them.

This is trickier to achieve on a talent site where you aren’t likely to be pitching to a specific client or brief straight off the bat, but it can be done. For example, if you have a wealth of copywriting experience for small businesses setting up websites and writing marketing communications, pitch yourself as a solution for this type of startup venture.

Acknowledge the client’s needs or their problem first, promote your services as the solution after. It will help you resonate well with your audience.


2. Make sure format, grammar and clarity are all on-point

It goes without saying, but we’re going to say it anyway to really hammer the message home. Correct spelling, accurate grammar, clear formatting, and concise communication of information is essential if you’re going to stand out.

Proofread meticulously, have somebody else cast an eye over it, and if writing isn’t your thing, lean on tools like Grammarly to rule out the possibility of errors that can make you look lax, lazy, or subpar against your competitors.

Confusing readers or overlooking mistakes will send clients sharply in another direction instead of reeling them in.


3. Be honest and genuine about your experience

When sharing your skills and experiences, make sure you’re only telling the truth. Lying, or even just embellishing reality, might turn heads initially but won’t stand you in good stead in the long term.

Everything you’re sharing about yourself should be genuine and authentic. You’ll find this boosts your confidence when pitching your services too, because you’ll do so with greater authority.

Talking up false information is a surefire way to compromise your confidence and set client relationships off on the wrong foot. Particularly when you get caught out!


4. Be open and transparent about your weak spots

On the flip side, it’s also important to be completely honest about any gaps in your skills, knowledge or experience that might impact your ability to fulfil a brief.

You might not necessarily broadcast this in your public pitch, but once conversations with potential clients start flowing, be upfront about any areas you might be lacking in. It’s better to communicate this early on in the relationship and manage expectations, rather than lie to impress and land yourself in a sticky situation further down the line.

It might be the case that the client takes you on as a freelancer and simply outsources other parts of the project. As the old adage goes, honesty is always the best policy, and it’s the foundation of longstanding professional relationships.


5. If you’ve got it, flaunt it

Don’t forget that the point of the exercise is to make sure your portfolio and relevant skillset are front and centre. But, if you have other benefits in your arsenal, make sure to give them a share of the spotlight too.

For example, if you can speak another language, or if you have additional certifications or qualifications, be sure to include those as part of your pitch as well. It will do a lot to bolster your appearance as a well-rounded and experienced professional.


6.  Regular housekeeping of your online profiles is the order of the day

Once you perfect your talent site freelance pitch, it’s essential to take care of it as you develop and grow. Doing so will speak volumes about you as a professional.

This involves keeping things like your contact details, availability and rate card up to date, as well as ensuring your profile picture is recent, of good quality and platform-appropriate (so no low-res images of you crowdsurfing at a music festival ten years ago).

It’s also a good idea to keep your pitches fresh and relevant by regularly scheduling in some time to update your portfolio and tweak the content wherever necessary.

This will ensure your talent site profiles never stagnate or become so outdated that bringing them up to scratch is a mammoth task that you continue to dodge.

Now all that’s left for you to do is go out there and pitch like you really mean it. Good luck!

Don’t forget to check out our How to Become a Freelancer section too!

Your Freelance Work and Trading Standards

As an employee of a business, trading compliance is probably not going to keep you up a night (unless that’s your actual job). However, when you’re a self-employed freelancer, you’ve got to protect your livelihood and professional reputation.

As a one-person band, the onus is on you to ensure that you’re always toeing the line when it comes to tax deadlines and Trading Standards. But what exactly does Trading Standards means for you?


What are Trading Standards?

Trading Standards, as we know them today, are a government service which sets out to safeguard consumers against any trading of goods or services that is:

  • Unfair
  • Unsafe
  • Misleading
  • Unethical
  • Illegitimate
  • Illegal

They hold businesses and service providers accountable to the legal standards which they must adhere to. If they don’t, customers are within their rights to report them to Trading Standards.


What do Trading Standards do?

Trading Standards were originally known as the Weights and Measurements Department. This was because the department was responsible for ensuring the consistent integrity of commercial weighing and measuring.

Over the decades, the department absorbed more responsibility, dealing with more Acts, Orders, and Codes of Practice as time went by. The department expanded as a result, and began working more closely with other regulatory bodies, eventually becoming the Trading Standards we know today.


Can a freelancer be reported to Trading Standards?

Yes, anybody offering goods or services to consumers can be reported to Trading Standards if the customer feels that there’s a reason to do so. Common reasons why somebody might report a business to Trading Standards include:


  • Feeling misled – If a customer receives a product or service that doesn’t align with what was advertised to them, they may feel misled into purchasing under false pretences.


  • Being left in danger – Customers left in danger or at risk of physical harm as a direct result of your product or information can complain about you to Trading Standards. This is also true if you do not complete a project and this means the customer is left in a compromising situation.


  • Fake or counterfeit goods – Where a customer purchases branded goods that they believe will be authentic at the time of sale but what they actually receive are counterfeit or fake.


  • Undue pressure to purchase – Because the customer feels unnecessarily pressured into purchasing goods or services against their will or better judgment.


Tips to avoid trouble with Trading Standards

Staying out of trouble with Trading Standards is mostly down to common sense and being reasonable. But where your business and livelihood are concerned, it can never hurt to be cautious.


Don’t overpromise or exaggerate

When trying to get a new client over the line or win a new project, it can be tempting to say whatever it takes to seal the deal. Overcommitting or inflating what you can offer will only leave you open to the risk of customers feeling misled or undersold though.


Avoid too many hard sell tactics

Again, when trying to secure or retain clients, try to avoid overly persuasive sales and marketing tactics that could be misconstrued as forceful or pushy. If a client says no, respect their decision and move on without trying to twist their arm.


Be open, honest and transparent

The best way to avoid any miscommunication or misunderstanding that might lead to a Trading Standards report is to be authentic and honest with your clients. As long as you remain genuine and true to your word at all times, you shouldn’t find yourself running into any trouble.


Put contracts in place with clients

As well as having honest communications with your customers, it’s also best practice to get any agreements down on record. Having both parties sign a contract helps you manage expectations, and will be a valuable resource to refer back to in the event of any queries or issues.


Never leave a project incomplete

This one goes without saying but to avoid any disgruntled customers making a beeline for the Citizens Advice Bureau, always see every piece of work through to completion, even if you hit some hurdles along the way.

Now that we’ve demystified the topic of freelance work and trading standards a little, hopefully you can continue providing your (fair and legal) services with utmost confidence.


Visit our information and resource hub for more freelancing tips and advice, including how to deal with your accounts and tax.

Is My Labour an Allowable Expense?

Whether or not you can classify your labour as an allowable expense comes down to how you pay yourself from the business, and that depends on what type of business structure you have in place.

As a sole trader, any profits that the business makes are yours to keep after paying tax. That means you aren’t able to reclaim the cost of paying yourself as an expense.

If you run a limited company, you are considered separate from your business, meaning you are able to pay yourself a salary as a company director.

Salaries are eligible as an allowable expense, so you can claim this back on the company tax return and lower your corporation tax bill.

You can also take dividend payments, but these are taken from the company profits, after tax, so the company cannot claim these as an expense.

Paying yourself a dividend through a limited company is one of the most tax-savvy ways to take money out of the business thanks to the lower personal tax that is paid on dividends.

So now, to put allowable expenses into a whole lot more context for you, let’s take it back to the very basics:

What are allowable expenses?

An allowable expense is something that comes at a cost to your business but is not taxable (exempt from being taxed). Allowable expenses are normally things that are essential to the running of the business, i.e., unavoidable costs, hence why they are eligible for tax relief. If you like things in visual form, this video explains allowable expenses for businesses in more detail!
Anything that applies as an allowable expense reduces the business’s taxable profits, and therefore brings your tax bill down.

So, for example, if your business has an annual turnover of £50,000 but you spend £5,000 on allowable expenses each year, you’ll only pay tax on the £45,000.

Common allowable expenses according to official HMRC guidelines include things like:

  • Cost of travel – tickets, mileage, fuel, and parking (excluding standard travel to and from work).
  • Costs associated to employees – salaries, bonuses, and pension contributions.
  • Uniforms and safety clothing (not your everyday work wardrobe).
  • Bills including phone bills, utility bills and rent payments.
  • Items you buy to resell (e.g., stock and raw materials).
  • Advertising and marketing, such as website running costs and business cards.
  • Business-related training courses.

It’s worth noting here that if you use the £1,000 tax-free trading allowance, you will not be eligible to claim expenses.

The trading allowance enables a sole trader to earn up to £1,000 in self-employment income tax-free, without needing to submit a Self Assessment return. However, if you use your trading allowance on your tax return, you can’t then claim allowable expenses. It means it’s important to work out all your expenses in advance, so that you can use the one which gives you most tax relief!

What allowable expenses can a freelancer claim for?

There are a number of allowable expenses that freelancers can claim tax relief on, particularly if you spend a great deal of time working from home (which might be now more than ever, post-pandemic).

Allowable expenses when working from home for freelancers include:

  • Council tax payments
  • Rent or mortgage interest
  • Phone/mobile usage (including data)
  • Internet connection
  • Utilities (heat, electricity, water)
  • Property insurance
  • Repairs and maintenance of business-related areas of the premises

For things like utility bills, internet, and phone costs, you can only claim for the portion of the expenses that are directly incurred through business use (not personal use).

HMRC leave it down to you to calculate these portions of usage but falsely swaying it in your favour is a risky move as it will spell serious trouble if you were to be investigated at any point.

As a freelancer, you can also claim for things like:

  • Stationery (including paper, printer inks, etc)
  • Computer software
  • Warranties
  • Accountant and bookkeeping fees
  • Postage costs
  • Business travel costs (e.g., vehicle insurance, fuel, parking, tickets, hire charges, hotel rooms, repairs)
  • Subcontractors
  • Some training courses
  • Agency fees
  • Insurance premiums
  • Some legal and/or financial expenses
  • Lease payments
  • Bank and credit card charges
  • Professional subscriptions

That list is by no means exhaustive either so it’s certainly of great benefit to look into the costs you could be getting relief on.

Hopefully, you’ve found this article useful but when it comes to staying on top of your tax efficiency, you might find it worth speaking to a qualified accountant. They’ll be best placed to point you in the right direction of what you can and can’t claim as an allowable expense when freelancing.

Do I Need a Business Mentor?

Answering this question is tricky because realistically, you don’t need a business mentor. You’re probably perfectly capable of surviving – and thriving! – without one.

That said, the rewards you can reap through working with a business mentor make it an extremely worthy investment – and with many services offering free business mentoring, all it might require is a simple investment of your time and brainpower.

Friends, family, and colleagues are all great sources of encouragement, support and inspiration, but expert guidance is what will really take you to the next level.

The benefits of working with a business mentor include:

  • Broadening your knowledge and skillset
  • Supporting the next generation of talent
  • A chance to learn from the experiences (and mistakes) of others
  • A neutral, non-biased perspective
  • Boosting your confidence as a business owner

All the above come together to foster a much more well-rounded entrepreneur, with the ability to make better decisions when it comes to developing an offering or service. It will do wonders for your self-confidence, which will have a knock-on impact on your performance.

So, to help answer the question about whether you should enlist the expertise of a business mentor or not, let’s look at each of the benefits in a little more detail.
Read More

Freelance Startup Support with the New Enterprise Allowance

Recent times have been tough to say the least. For freelancers and the self-employed it’s been a time of struggle, looking for support amidst the global health and economic crisis of COVID-19.

That’s why we make it our mission to guide aspiring freelancers and budding business owners towards the grants, policies and support avenues that are out there to help them.

Today, we turn the spotlight on the New Enterprise Allowance (NEA), which has been in force since 2011 but is perhaps now more valuable than ever. Read More

Can I Freelance Whilst Working for an Employer?

The very short answer to this question is that yes, in most cases you are allowed to carry out freelance work whilst in employment.

That said, there are a number of circumstances that might mean this isn’t the case, or that there are conditions your employer expects you to adhere to.


Why decide to freelance if you’re already working?

Common reasons why some people choose to freelance alongside full-time or part-time employment include:

  • Earning extra money to supplement their salary.
  • Fulfilling a skill or passion that’s a diversion from their regular day job.
  • Using it as an opportunity to learn and practice new skills.
  • Having more creative control or professional autonomy over projects they’re working on.


Are you ready to jump straight in?

But why not just take the plunge, and become a full-time freelancer? Well, it’s not for everyone. The decision to freelance alongside employment, rather than instead of it, is often down to factors like:

  • Not yet earning enough through freelance income alone.
  • Not wanting the pressure of drumming up business or relying on clients to pay on-time, as opposed to a regular monthly PAYE salary you don’t have to chase or worry about.
  • Concerns that securing a mortgage or other finance will be made more difficult if freelancing is the sole source of income.
  • Preferring the culture of a shared working environment and ‘office life’ (freelancing can sometimes get a bit lonely).

So, for some people, choosing to freelance as a side hustle is the most desirable option. Just as long as it’s manageable, and your employer permits it.

To make things as stress-free as possible, and to keep you out of unnecessary trouble, here are some tips on balancing freelance work and employment.


Start by checking your employment contract

Some employers ban their workers from undertaking freelance work entirely. If this is indeed the case, it should be made clear in your employment contract.

So, before you get stuck into any gig work or side projects, make sure you check! You don’t want to breach any rules that might affect your employment status if your boss gets wind of it.


Why won’t my employer let me freelance?

An employer might refuse permission to carry out any freelance work for a number of reasons. For instance, if your potential clients would mean you’re going after the same audience.

For you, as a freelancer, it makes perfect sense to seek out additional work in the same industry or marketplace. After all, that’s where your skillset and experience lies. Understandably your employer might be less keen to have another competitor in the arena!


Be transparent with your employer by putting them in the picture

If your contract doesn’t contest freelancing then by all means, get stuck in but first, have a conversation with your employer. Not because you’re obliged to, but just because it’s the considerate thing to do.

You never know, your employer might even support your side hustle and be willing to discuss things like flexible working hours to accommodate it.

The best working relationships begin and end with open, honest lines of communication so we always recommend keeping your employer informed.


Make your freelance clients aware of your other commitments

On the flip side, as well as keeping your employer in the picture, it’s also a good idea to be honest and transparent with your freelance clients too.

Although it can be tempting to conceal your employment commitments, making your freelance clients aware of your working hours and realistic availability will help manage expectations on both ends. It will also help make sure they’re setting you attainable deadlines and ensure that you don’t end up spread too thinly or completely burnt out.


Acknowledge when the balance becomes too biased

One final word of advice before we depart is to stay abreast of how the balance is tipping. You don’t want your work in one area causing you to underperform in another.

You can’t let your freelance work detract from your day job (in time or energy) but if you’re passionate about, and inspired by, your extracurricular projects? Then you shouldn’t let employment completely bulldoze that either.

If you notice a bias starting to develop, it might be decision time. Perhaps you’re ready to take the risk and go full-time freelance. Or alternatively, you might need to scale back your side hustle to improve your wellbeing and health.

If you’re considering freelancing, check out our article for things to consider before you get started, or check out our support hub for becoming self-employed..

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