Do Freelance Job Sites Charge a Fee?

Do Freelance Job Sites Charge a Fee?

The best thing about being a freelancer is that you’re responsible for everything, and the worst thing about being a freelancer is that you’re responsible for everything.

Wouldn’t it be nice to have a little help every once in a while? That’s where freelance job sites come in. But how do they work exactly?

And, perhaps most importantly, do they take a cut of your earnings? Let’s take a closer look.
 

What is a freelance job site?

Quite simply, it’s a platform that helps you find freelance projects and jobs, and connect with clients.

There are a couple of different types, and which you go with is really a matter of personal preference. Like all decisions, it’s usually best to consider your specific needs against what’s available.

For example, there are freelance bidding platforms where clients list jobs and freelancers submit their quotes for the work. There are also sites like Lemon.io which completely flip the script by listing freelancers and encouraging potential clients to enlist their services.
 

How can freelance job sites help me find work?

There are some freelance job sites that target specific industries, while others take a more general approach and cast the net wide.

Either way, the good ones streamline the usually painstaking process of sourcing and securing work by getting freelancers in front of people looking to outsource work. The client will normally need to provide some sort of brief for the work they have in mind. Lots of freelancing platforms will have mandatory fields for things like whether this is an ad-hoc project or an ongoing contract, for example.

Once you find the right one for your needs, a freelance job site can be an invaluable resource, enabling you to expand your network and build your reputation in whatever industry you’re a part of. Especially if you’re just starting out!
 

Freelance job site fees

Let’s examine a few real-world examples of common freelancing platforms and typical fees they charge.
 

Upwork
  • Freelancer Service Fee ranges from 0% to 15% per contract
  • Set based on factors that help support a balanced and competitive environment across different types of work
  • A fixed fee, meaning it won’t change once your contract begins

 

Fiverr
  • No subscription required
  • Charges a 20% service fee on everything you earn through their online marketplace
  • Automatically assessed at the time a client’s payment is paid out to you

 

Guru
  • Signing up for an account is free for both freelancers and clients
  • Charges a service fee based on a freelancer’s earnings from each project completed, typically between 5% to 9%
  • Freelancers can choose from different membership plans, offering various benefits like reduced fees per project, or increased visibility on the platform

 

Are freelance job site fees tax deductible?

If you’re subscribed to any of these sites and pay a membership fee or have fees deducted from your earnings, you can usually deduct this as an allowable expense.

An allowable expense is something which relates wholly and exclusively to your business, and a platform fee for finding work would absolutely fall into this category.

 

Am I still self-employed if I use freelance job sites?

Yes! Using a platform to find work doesn’t change your employment status unless you start working as someone’s employee. This means you need to register for Self Assessment if you haven’t already, and submit tax returns so you pay the right amount of Income Tax and National Insurance.

If you’re not totally clear on how to go about this (or just feel unsure about it), a qualified accountant can break everything down and walk you through the process.
 

What if a client doesn’t pay?

The response to this can vary from platform to platform, but most freelance job sites have at least some kind of protocol in place for when a client stops paying (or even replying).

With Upwork, for example, logged hours that meet the requirements for Hourly Payment Protection will still be invoiced and paid to you by the platform through the usual weekly cycle – even if your client doesn’t respond or fails to pay.

Fixed-price projects are a little different, with you needing to complete your current ‘milestone’ before ending the contract. If you don’t, you risk losing access to any project funds that might be set aside.

 
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.

How Can I Advertise Multiple Businesses as a Freelancer?

How Can I Advertise Multiple Businesses as a Freelancer?

It can sometimes pay to have as many strings to your freelancing bow as possible in today’s increasingly competitive and technological world, enabling you to diversify when needed.

That’s a nice (and perfectly sensible) idea in theory, but what if it means branching out into areas so varied you end up running multiple freelance businesses, rather than extending your existing service? In which case, how on earth are you supposed to promote all of them at the same time?

It’s a question we regularly encounter, so in this article we share our favourite tips for promoting multiple freelance businesses at once.
 

Can I have more than one business?

Absolutely. Whether you operate multiple limited companies or as a sole trader, there aren’t any restrictions on the number of businesses you can set up or be involved in.

Just bear in mind that being a sole trader means you operate as an individual, so there’s no legal distinction between you and your sole trader business(es). You’ll still submit one single Self Assessment tax return, but you’ll need to include separate sections for your various businesses.

If you need to use MTD Income Tax then you’ll still only submit one single tax return, but each business will need its own quarterly update. For instance, if you have two sole trader businesses, you’ll submit eight quarterly updates!
 

How do I separate my businesses for marketing?

When it comes to actually promoting your different businesses, you’ll want to have an overall plan of some kind. Things can get very confusing for both you and your clients otherwise.
 

Branding

Your branding is the way you create an obvious consistent identity for your business. If you run multiple businesses then you could try to make each as different and unique as possible. Or, in other words, find a way to distinguish them from one another.

Conversely, you can focus on developing a cohesive brand identity that encompasses everything, with this making it a lot easier to promote yourself and your services. In a sense, you’ll just be promoting one business which offers different services.

This might not be useful if they’re in wildly different industries, but if they’re related then it might even allow you to use the brand loyalty from an existing business to attract customers to a new one.

Finding a way to organically link different businesses is no mean feat, which is why it’s imperative that you focus on what you’re passionate about. This way, you become the brand.
 

Platform strategy

If you do decide to keep your businesses as separate entities, one strategy is to make use of different social media platforms or networks.

For example, you could keep LinkedIn reserved for your primary business and promote your other endeavours on Instagram or TikTok.

Alternatively, it is possible to create two or more company pages on LinkedIn if that’s your preferred networking site (you just can’t create more than one personal profile). The only real downside is that company pages aren’t the best in terms of engagement, likely because they tend to lack personality.

The important thing is to target the right customer base for your business, and if that means having a presence on TikTok, then so be it. You don’t have to dance.
 

Content strategy

Let’s have a think about the actual content you’ll post – and where.

Now, if you like the idea of being the brand yourself, you could simply post different types of content on your own personal profile, whether that’s on LinkedIn, Instagram, or some other site.

An argument can be made, however, that this isn’t the most effective strategy, as people tend to follow others for very specific reasons (unless there’s an existing relationship, of course).

You may find that you start to lose followers if your content isn’t consistent. It’s why picking a lane and committing to it could actually be the best strategy in the long run.

A more subtle approach would be to prioritise content related to your main business, and then drop the odd hint about the other services you offer.

This strategy allows you to plug your side hustle(s) without compromising your own unique brand, meaning you shouldn’t lose followers as a result.

You could also look out for online groups or forums to join. These can offer a less public way to network with potential clients if you’re particularly concerned about muddying the waters.
 

Set clear guidelines for yourself

As we mentioned earlier, running multiple businesses can get rather confusing, but there are things you can do to make it at least a little easier for yourself.

For example, make it a rule that each of your businesses will be distinct in terms of pricing. While seemingly simple, this could be the difference between staying on track and not.

 
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.

Should I Be a Specialist or a Generalist as a Freelancer?

Should I Be a Specialist or a Generalist as a Freelancer?

This is an age-old debate for freelancers, with the answer not being immediately obvious. You might think it’s better to have as many strings to your bow as possible, but what if someone is looking for specialised knowledge in a particular area?

In that instance, it would actually be better to be something of an expert in said area – as opposed to a jack of all trades who knows a little about everything.

But is it always better to be a specialist? And how do you choose what to specialise in?
 

What is a freelance niche?

It’s basically just an area of expertise that you specialise in, and that people therefore come to associate you with.

You can also think of yourself as a kind of brand, meaning people will come to associate you with a particular kind of product or service that no one else really offers.

The niche you ultimately choose is of course the thing that will determine how you’re thought of, with it essentially becoming your whole identity as a freelancer.

This isn’t something to fear, but to be embraced. After all, if you don’t believe in your niche, why should anyone else?
 

Why choose a niche?

First and foremost, you need a way to stand out from the crowd in an increasingly competitive marketplace.

One of the best ways to do this is by picking a lane, as it were, and fully leaning into it so that you become people’s “go-to” for that particular thing.

It’s not about limiting yourself but taking on a unique identity.
 

Why does this work, though?

Because hiring an “expert” to do a specific job is much more low-risk than hiring a more general freelancer who may only have a working knowledge of the field you’re in.

Furthermore, leaning into a niche enables you to start building your brand, as you now have something to base it on. This is also key when it comes to marketing yourself (which we’ll get to later).

Those who’ve enlisted your services may even refer you to others, and it’s generally accepted that workers who pick a specialty are able to charge more, as the work they do is more bespoke.

You’ll also save yourself a lot of time being a specialist freelancer, as you won’t need to go looking for work. Rather, it will find you – especially if you’re able to build a reputation as a trusted and reliable expert.

Gone will be the days of sending out random proposals to people who aren’t interested!
 

Why stay more generalised?

On the other hand, there are benefits to being more open as a freelancer.

The most obvious one is that you have access to more opportunities, which (in theory) equals more work. In this sense, generalisation may provide you with a greater sense of security than being a specialist in a specific area.

We also live in an ever-changing and increasingly competitive world, so it can be argued that locking yourself into one thing might not be the best idea.

A more general freelancer is able to adapt to their changing environment thanks to their ability to pick up new skills on the fly, and this means they’re ready for anything.
 

How do I choose my niche?

The million-dollar question. Generally speaking, there are two main approaches to this, with the first focusing on your own skills.

Consider your strengths and weaknesses, and use these to form the basis of the services you offer, prioritising what you know you’re good at.

Alternatively, you can choose to focus on whatever you think people are looking for, and this obviously involves undertaking a fair amount of research so that you have your finger on the pulse.

The best approach is probably somewhere in the middle. Whichever you end up choosing, though, try to ensure there’s a market for your niche before you go all in.
 

How do I market my new niche?

Okay, so you’ve picked a lane and found a way to stand out from the crowd. Now what?

Well, people have to know you exist before they can enquire about working with you, and so a good marketing strategy is crucial. This can take a number of different forms, though.

For example, email marketing is now a popular way of getting the word out about yourself, and involves sending promotional email communications to people on your mailing list.

It gives you a direct line to those who are interested in what you have to say (and offer), boosting customer retention while also encouraging any prospective clients to commit to working with you.

It can also be a very cost-effective form of marketing with a high return on investment – so long as you’re able to deliver content that’s useful and engaging.

Some other things you can do to promote your services are:

  • Become a member of a professional association
  • Network with other industry professionals at things like conferences
  • Make use of the internet (for instance by using LinkedIn to network, or raising awareness on Reddit)

 
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.

How Does IR35 Affect Freelancers?

How Does IR35 Affect Freelancers?

One of the big attractions of freelancing is the freedom to choose your own schedule, and when and where you work. Sometimes, however, you might find yourself being treated like a regular employee rather than a self-employed contractor.

Not only is this not what you signed up for, but it can actually get you in trouble with HMRC! This is because of legislation called IR35, which was introduced by the government to help tackle the issue of tax avoidance.

What actually is it, though? And how does it affect you if you’re a freelancer? Let’s take a look.
 

What is IR35?

The primary motive of the IR35 rules is to determine an individual’s employment status for tax purposes. It was introduced in an effort to clamp down on ‘disguised employees’ slipping through the tax-paying net.
 

What would be the benefit of disguised employment?

A disguised employee is someone working for a client on a supposedly self-employed basis, when in reality the working relationship is more like an employer and employee.

Before IR35 was introduced, a business could take on a contractor rather than hiring the same person as an employee. They wouldn’t need to pay National Insurance or other contributions, and wouldn’t have the responsibility of looking after staff.

For the freelancer, it was an opportunity to pay themselves in a more tactical way through their own limited company. This usually resulted in a lower tax bill than they would pay as the client’s employee.

Of course, not all disguised employees come about as a result of dishonesty. Sometimes, it’s because business owners and contractors aren’t sure where the boundaries lie.
 

How do I know if I’m inside IR35?

Being ‘inside’ IR35 means the way you’re working with a client falls within the remit of IR35 rules. A basic rule of thumb is that if you’re being asked to work the same hours as a regular employee, at the same location, and without the power to decide, you’re almost certainly inside IR35.

There’s also the question of Mutuality of Obligation, where there is any kind of obligation to give or accept work (on either side), rather than having the freedom to accept contracts as you wish. Freelancing is, of course, supposed to be flexible, allowing you to pick and choose the projects you want to work on, so it’s something to look out for!
 

What happens if a freelancer is inside IR35?

If you’re ‘within IR35’ for a particular project or job, then this has implications on how you pay tax. You’ll be considered an employee for tax purposes, and the ‘client’ must therefore deduct Income Tax and National Insurance contributions in the same way they would for an employee paid through their payroll.

If you’re outside IR35 and therefore not considered to be an employee for tax purposes, your bill will be paid to you in full without deductions. Whether your client makes deductions or not, you must report your income in your tax return!
 

Who decides if a freelancer is within IR35?

It’s up to the client to decide, but only if they’re a medium to large-sized private company which has either:

  • More than 50 members of staff on its workforce
  • Annual sales in excess of £10.2 million

 
If the client doesn’t meet the criteria, then you’re responsible for determining your own IR35 status. If you think you might need help determining your status (or just to be on the safe side), you can make use of HMRC’s online CEST (Check Employment Status for Tax) tool.
 

Contesting IR35 decisions

It’s worth knowing that you can contest a client’s verdict on whether you’re operating within or outside IR35. HMRC’s Alternative Dispute Service enables you to escalate the issue and contest the decision.

When starting work on a new contract or with a new client, make sure you have agreements down in writing to refer back to if necessary. It’s also worth doing this for any ongoing existing contracts.
 

Can I freelance for an old employer?

This is where things get a little complicated. If a previous employer gets back in touch with you to try and enlist your services as a freelancer, what’s the correct response?

After all, you don’t want to get in trouble, and wouldn’t you automatically fall inside IR35 if you were to say yes? Well, not necessarily.

It really boils down to whether or not you operate in a way that contravenes the IR35 rules, based on the criteria outlined above. Again, the basic rule of thumb is that if you feel as if you’re being treated like a regular employee, you might have something to worry about.

Failing to comply with IR35 can result in financial penalties.

 
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.

How to Register as Self-Employed as a Freelancer

How to Register as Self-Employed as a Freelancer

Many freelancers start off keeping their day job and freelancing in their spare time. It can be a good way of finding your feet and trying it out before taking the plunge and going freelance full-time.

However, because of the casual nature of the work, some freelancers are in danger of ignoring the legal implications of working on the side. You might not think your side venture counts as a business but it does, and you have certain responsibilities as a result.

Whether you’re planning on setting up a full blown business or are just thinking of an occasional casual thing alongside your job, the rules are the same and you still need to register as self-employed with HMRC if you plan to make any money from your ventures.

The good news is that it’s fairly easy to do.

 

What does being a sole trader actually mean?

As a freelancer, you’re going to have to register as self-employed and more specifically as a sole trader.

Despite how it sounds, it doesn’t actually apply to people who just work alone. So you can take on staff if you want. It just means that you’re solely responsible for the business.

How to register

You should register as soon as you can after starting your business and can through the government’s website here.

You have until 5th October in your business’s second tax year in order to do so. If you don’t register in time you won’t face a penalty as long as you send your tax return and pay your bill on time.

How you register will depend on whether you’ve ever sent tax returns before.

Never sent one?

If you’re a sole trader who has never sent a tax return, you need to tell HMRC you want to be a sole trader by registering as a new business.

You will then register for Self-Assessment tax returns which you’ll use to report your income at the end of every tax year, and National Insurance at the same time. For more information about the different types of National Insurance you need to know about, click here.

Sent a tax return in the past?

If you’re a new sole trader who has sent a tax return before as an individual for things like investment or rental income, you will need to register as self-employed.

You will also need to register for Class 2 National Insurance using a CWF1 form. This will allow you to continue using your Self-Assessment account.

In order to do this, you will need your Unique Taxpayer Reference (UTR) so that HMRC can link your accounts. You can find this on your previous tax returns, online account or from documents from HMRC. Contact HMRC is you can’t find your UTR.

Starting up again?

If you’ve ever registered or done business as a sole trader, then you will need to reregister in order to set up trading again. You will need to reregister using the CWF1 form and your UTR so that you can use your existing account.

The process of registering as a sole trader will take around 10 working days, or up to 21 if you’re registering from abroad. This is because HMRC will post you an activation code which you will need when you sign into your online account for the first time.

Once you’ve registered and set up a system for managing your finances you can then go about growing your business. You may even want to hire an accountant who can take care of your bookkeeping and taxes so that you’re free of the stress and the time that you could be spending elsewhere on working on your business.

Your responsibilities

The work’s not over once you’ve registered. As a business owner, you have certain legal responsibilities in order to comply with HMRC’s rules to avoid getting penalised.

It’s important to make sure you’re always running your business by the books and aware of how much tax you’re going to owe so you don’t get hit either with a nasty surprise or even a fine if you don’t pay your taxes on time.

In order to keep your business above board, you will need to do the following:

  • Keep records of sales and expenses, including bills for expenses
  • Send a Self-Assessment tax return each year
  • Pay income tax on your profits and Class 2 or 4 National Insurance
  • Settle debts
  • Register for VAT if your turnover reaches the threshold of £83,000

Hiring an accountant will make this process easier as they will be able to give you the best advice regarding things like expenses and tax efficiency as well as making sure that your business is doing everything the right way.

Hiring an online accountant and using a free accounting software like Pandle will help you save money.

Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.

Handling Negative Reviews as a Freelancer

Handling Negative Reviews as a Freelancer

As a freelancer, you kind of are your business, and so any negative review is going to feel like a personal attack. This is totally normal, so it’s not unreasonable if your emotions temporarily get the better of you.

That said, while lashing out might feel good in the moment, it won’t help you attract prospective clients in the future.

Reframing a “bad” review is an opportunity to improve and demonstrate your commitment to client satisfaction. To help you out, let’s go through some of the things you can do to make sure you’re dealing with negative reviews in the right way.
 

Find the feedback

It might seem obvious, but you can’t deal with a review you’re not even aware of! How do you make sure you don’t miss anything, though? After all, it’s not called the world-wide web for nothing.

Well, the first thing you can do is make a habit of regularly checking the relevant review sites and social pages. This should ensure nothing escapes your notice.

Alternatively, you could consider using some kind of social listening tool to automate the process and help you find feedback you’re not tagged in.
 

Assess the situation

It’s important not to react right away. Before you do anything, verify that the review is in fact legitimate (and not someone trolling).

You should then conduct an internal investigation into whatever the complaint is about, making sure to be as thorough as possible so you can determine exactly what happened and whether or not the person is justified in feeling aggrieved.
 

Respond promptly

This initial response is really just about acknowledging the review and letting the person know that you’re looking into the matter. In that sense, you can think of it as a kind of placeholder.

Still, though, it’s a good idea to apologise and express your sympathy up front, as this shows you care about your clients’ feelings – regardless of why they feel the way they do.

Again, try and refrain from going on the offensive (we know it’s tempting). It tends not to be very constructive and only serves to make you appear as if you don’t care, or are above taking criticism.

Also bear in mind that any response you post online or on social media will be visible to prospective clients, and it may be a deciding factor in whether or not they ultimately choose to enlist your services.
 

Take the matter offline

After posting your initial response, you should contact the client directly (by email, telephone, or even direct message) as a way of following up. This once again demonstrates your commitment to rectifying the situation.

You should do your best to explain what (if anything) went wrong, based on the results of your internal investigation.
 

Knowing what to do next

If you are actually at fault, then simply own up to your mistake and hope the person appreciates your honesty. If not, you should still apologise for the fact they aren’t happy, but there’s no real point going into any kind of detail.

It’s also advisable to ask the unhappy client open-ended questions, as the answers to these might provide you with more clarity on what steps you can take to fix the situation and prevent it from happening again in the future.
 

Rise above it if you have to!

Of course, it’s impossible to please everyone, and you will sometimes have to accept letting a situation remain unresolved (as annoying as this is).

Even when dealing with a difficult or unreasonable client, though, you should conduct yourself with grace and try to find the silver linings (e.g. feedback which can be used to help you improve moving forwards).

People will be people at the end of the day, and sometimes there’s just nothing you can do.
 

Update your public response

The final thing you should do is revisit your initial response and update it to reflect the fact that you’ve spoken with the client and (hopefully) resolved the matter.

Your final response should confirm that you carried out an investigation and contacted the client directly to follow up.

In addition, it should state whether the outcome was positive or negative, and it wouldn’t hurt to chuck in one last apology for good measure!

Now, if you fancy pushing your luck, you can test the waters and see if the client would be willing to either change their original review or write a separate testimonial speaking to the way in which you reached out to sort their issue.

 
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.

Best Accounting Software for Freelancers

Best Accounting Software for Freelancers

The importance of having good bookkeeping software can’t be overstated, and this is especially true if you’re doing everything yourself.

One of the main advantages of being a freelancer is that you answer to no one, but this also means you’re solely responsible for ensuring the smooth running of your business. No pressure!

Bookkeeping, the process of recording all the transactions in your business, is one area where it can be particularly difficult to keep track of everything all on your own, which is why good software can prove invaluable, simplifying your financial management and saving you precious time in the process.

There are lots of great options out there, though. So how does one know which to pick?

Well, hopefully we can help with that, as we’ve compiled a list of the three best bookkeeping software applications for freelancers based in the UK. We’ll go through the pros and cons of each, and see which one comes out on top.
 

Xero

This is one of the most popular and well-established options in the UK, among businesses and self-employed individuals alike. Some of the key features include:

  • Real-time bank feed integration
  • Customisable invoicing
  • Detailed financial reports (profit and loss, etc.)
  • Making Tax Digital (MTD) compliant

 

Pros

A big factor in Xero’s popularity is its commitment to integrating third-party apps (PayPal and HubSpot, for example). This allows the software to feel somewhat familiar, even if someone’s never used it before.

On top of this, Xero’s overall design is incredibly intuitive, and this further reassures new users, who actually get the sense they know what they’re doing.

Xero is also just a good all-round option, being suitable for businesses of every size, and in every kind of industry.
 

Cons

In spite of the intuitive design, there are some more advanced features which new users might struggle to make proper use of right away.

And then there’s the price. The premium plans offered by Xero are a little more costly than many of those offered by its competitors, and so this is something to take into consideration.

What’s the difference between the standard and premium plans? For starters, the standard plan puts a limit on the number of invoices you can send, as well as the number of bills you can enter.

You also miss out on several key features, such as the ability to track projects and use multiple currencies.

Essentially, the more expensive the plan, the more features you have access to and the less restrictions are placed on you.
 

FreeAgent

This is another leading bookkeeping software specifically designed for businesses, freelancers, and contractors based in the UK. Its key features include:

  • Self-Assessment and tax calculation
  • Project management (track time and expenses, etc.)
  • Real-time bank feeds
  • MTD compliant

 

Pros

The main advantage of using FreeAgent as a freelancer is that it boasts features which are specially tailored for people like yourself. A prime example of this is the project management tool, which is ideal for those who bill by the hour (like most freelancers!).

Pricing is also inclusive, meaning you are able to have unlimited users, clients, and projects. It’s a fixed price at £14.50/month for the first six months, and £29/month thereafter.
 

Cons

FreeAgent is obviously less equipped to handle larger or more complex businesses, but this shouldn’t really be a concern if you’re self-employed.

There are also limited integration options in comparison to software like Xero.
 

Pandle

Last but not least, there’s Pandle, which offers free bookkeeping software for freelancers and business owners. What are some of the key features?

  • Send quotes and invoices
  • Automated payment reminders
  • Bank reconciliation
  • Accept invoice payments online
  • Mobile app
  • Business reports
  • Multiple currencies
  • MTD compliant

 

Pros

First of all, ease of use is a priority, with Pandle having been built to be used by pretty much anyone. It even has safeguards in place to help users minimise the risk of making mistakes in their bookkeeping – so even if you think you’re rubbish when it comes to tech stuff, you can rest assured you’ll be fine.

If you do find you need assistance, though, you’ll have access to a support team of specialist bookkeepers.

Another big thing is that it saves you time by automating a lot of the more boring and usually lengthy processes.

In addition, Pandle includes features to assist you in working with customers and suppliers more efficiently, and these are all on top of the standard banking, accounting, invoicing, and reporting tools.

What about pricing? Well, as previously mentioned, the base version is totally free, but even the paid tier (Pandle Pro) is still reasonably priced at £5 + VAT per month. This makes Pandle a more viable option for freelancers than a lot of the other ones on the market.
 

What’s our verdict?

Xero is an excellent one-size-fits-all option, with its real-time financial insights making it a top choice for businesses looking to streamline their bookkeeping.

FreeAgent, on the other hand, is a great choice for freelancers specifically, offering a straightforward tool that simplifies self-employment tax, as well as project tracking.

All in all, though, it must be said that Pandle offers the most comprehensive package at the best price point. It’s not just an affordable alternative; it’s a top-quality service, and the perfect choice for any freelancer who wants to finally take control of their accounts (but without breaking the bank).

 
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.

Can Freelancers Get a Mortgage?

Can Freelancers Get a Mortgage?

There are numerous benefits to being a freelancer, the most obvious one being increased freedom and flexibility in all areas – from where and when you work, to who you work with and what kinds of projects you choose to work on.

As a freelancer, your destiny is in your own hands, and this is the main reason so many people have made the switch and gone out on their own.

But the road less travelled is often precarious, with freelancing bringing its own set of challenges.

When it comes to securing a mortgage, for example, you may discover that you have your work cut out for you.

Why, though? And what, if anything, can you do about it? Let’s take a look.
 

Is it harder to get a mortgage as a freelancer?

Generally speaking, yes – it can be. From the perspective of a potential lender, freelance income is typically considered to be far more unpredictable than a salaried income. Someone who undertakes freelance work simply can’t provide the same level of certainty or reassurance as someone who is a PAYE employee on a fixed annual salary.

The reality is that not all loans are created equal, and so it’s reasonable to assume that, as a freelancer, you will be judged more harshly than someone in full-time employment.

On top of the fluctuation typical of freelance cash flow (which can be a red flag to mortgage lenders), there are also business expenses to consider on top of your personal costs, and these can further affect your ability to pay back what you owe.
 

What can freelancers do to help secure a mortgage?

So, where does that leave you? Is it all doom and gloom? Thankfully not, as there are some steps you can take to try and improve your overall attractiveness to potential lenders when you’re getting ready to buy a house as a freelancer.
 

Put down a bigger deposit

In most cases, the bigger the deposit, the more reliable (and therefore attractive) you’ll appear to a lender.

You’re essentially putting your money where your mouth is and demonstrating your commitment to repaying the loan in full, which of course makes the lender feel better about the whole thing.

It ultimately comes down to your own unique situation and financial circumstances, meaning it’s a good idea to seek advice from a specialist in the field. A mortgage broker or lender will be able to go over your options, and a good accountant will be able to get into more detail about affordability.
 

Gain experience as a freelancer

As we’ve established, mortgage lenders can be wary of freelance applicants due to the unpredictable nature of freelance work, which can result in missed payments.

It’s smart to try and log at least two to three years’ worth of freelancing financial records before you approach any potential lenders, as this way you’ll have something to point to which demonstrates your reliability.

You’ll still need to show that you have plans for the future, but, more than anything else, historical information serves to reassure lenders that you actually know what you’re doing (no small thing).

Also, you can use the extra time to increase the size of your deposit!
 

Maintain a good client list

Like the financial records, a good client list will go a long way towards convincing a potential lender that you can be trusted to deliver.

The best way to attract clients is by putting a marketing plan into effect, and this should include such things as an online presence and pitching. If you’re just starting out, you’ll want to start relatively small and build up to taking on more work (and from a wider variety of clients).

One thing to remember is not to put all your eggs in one basket, so to speak. For example, by relying on one big client who could up and leave at any time. At the beginning, you want to focus on baking muffins, not cakes!
 

Keep good credit and business records

This should really go without saying, but any potential lender will more than likely conduct a credit check on your business, and so it’s a good idea to deal with any outstanding loans in advance.

More generally, you should also ensure your records are in good shape (accurate/up-to-date) and keep an eye on your cash flow.

If you think you might need help with this but you don’t want to hire an accountant or bookkeeper, good bookkeeping software will automate the whole process, meaning you don’t have to rely solely on your own judgment.

It’s also worth noting that if you operate as a sole trader, then legally speaking there’s no difference between you and the business. It makes it even more important that you can show a separation between freelancing finances, and your personal transactions.
 

Find an accountant

Working with a good accountant can be another marker of stability in the eyes of a mortgage lender. They’ll help you keep your finances in order and minimise mistakes, while an exceptional accountant will also advise you on how to be more tax efficient in the process.

Of course, they can also assist you with a mortgage application, making sure you’re giving yourself the best possible chance.
 

How much can a freelancer borrow?

Unhelpfully, there’s no cut and dried answer to this, as borrowing is based on an individual’s annual income and unique circumstances. This means the amount you can borrow is different for everyone.

Generally speaking, though, the higher your annual income, the more you will be able to borrow, and an accountant can help you get the best deal possible.

 
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.

Can I Freelance for an Old Employer?

Can I Freelance for an Old Employer?

You don’t want to get in trouble. So, what exactly are you supposed to do when a previous employer reaches out looking to enlist your services on a “freelance” basis?

Does it matter that you used to work for them? Would you fall inside IR35 if you were to say yes?

You probably have a lot of questions (including, “What’s IR35?”), but that’s ok because we have a lot of answers.
 

What is IR35 for freelancers?

In a nutshell, the IR35 rules were brought in to make it more difficult for employees to avoid tax by working for former employers through their own limited companies. They’re part of a wider initiative to try and tackle the issue of tax avoidance.

Now, you might be wondering what exactly constitutes a disguised employee. This is basically a person who works for someone on a self-employed basis, when in reality they’re functioning as a typical employee. Employers will often benefit from this kind of arrangement in that they wouldn’t have to pay National Insurance or other contributions, while the disguised employee wouldn’t have to pay as much tax.

The primary motive of IR35 is to determine a person’s employment status for tax purposes, and this ensures that everyone is paying the correct amount of tax and contributions.

One important point to note is that being IR35 compliant isn’t a fixed thing you achieve once and that’s it. In other words, the rules apply to each individual project you take on as a freelancer, and so it’s a constant battle to stay compliant. IR35 is also relevant to all industries and sectors, not just the creative ones (a common misconception).
 

If I work for an ex-employer, will I instantly be inside IR35?

Not necessarily. It all depends on your own unique situation. For example, are you in a position to set your own fee and choose when and where you work? If the answer is yes, then you’re more than likely fine.

If not, and the way you work is more like an employee in everything except for name, you could be heading into dangerous waters. Failing to comply with IR35 can result in financial penalties.

A basic rule of thumb is that if you’re being asked to do a 9-5 working exactly like you used to, you’re probably inside IR35. As a freelancer, you shouldn’t be treated like a regular employee.
 

Signs you’re inside IR35

There are additional signs to look out for:

  • Your role is indispensable, meaning you can’t easily be replaced by another freelancer
  • There’s a Mutuality of Obligation (any kind of obligation to give or accept work on either side, like there is between an employer and employee)
  • Your work isn’t contracted by the client company directly
  • You don’t invoice your client directly, and use an intermediary
  • You’re not responsible for your own Public Liability insurance or Professional Indemnity insurance (where applicable)

 

Who decides if a freelancer is inside IR35?

Since April 2021, it has been for the client to decide whether a freelancer they’re working with is inside IR35 or not, so long as that client is a medium-to-large-sized private company.

In this context the company is one which has more than 50 members of staff, or has annual sales in excess of £10.2 million.

An important reminder here for freelancers is that you can contest a client’s verdict on whether you’re operating inside or outside IR35.

If you undertake freelance work for a small private company, then the onus is on you to determine your own IR35 status. Use HMRC’s online CEST (Check Employment Status for Tax) tool and keep a record of the determination, and the information you use to get that result.
 

Can I take on my ex-employer’s clients?

This is something else you might be wondering about if you’re now out on your own as a freelancer. As an employee, you had access to important information regarding clients – phone numbers, email addresses, etc. – but are you now allowed to make use of that information, even though you don’t work for the company anymore? Would this be ethical? Or even legal?

‘Solicitation’ in the context of employment law occurs when an ex-employee intentionally “persuades” previous clients, suppliers, vendors, other employees, or other affiliates of their former employer to work with them and/or their new employer instead.

Whether an employee is soliciting or not is a fact-specific thing, and whether it is legal or not depends on the unique circumstances.

For example, if there’s some kind of enforceable ‘non-solicitation’ agreement or written contractual term prohibiting the employee from soliciting from their employer – even after the end of their employment contract – then the employer can choose to sue the employee to hold them accountable.

In general, then, you want to try and exercise discernment when undertaking freelance work for a former employer. IR35 status is quite a nebulous concept which can be difficult to fully comprehend – even for HMRC!

 
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.

Five Advantages of Hiring Freelancers on An Online Marketplace

Five Advantages of Hiring Freelancers on An Online Marketplace

In today’s increasingly digital and tech-savvy world, more and more companies are choosing to hire freelancers on an ad hoc basis instead of employing additional full-time staff to carry out the same tasks.

The nature of freelance work is that it’s flexible, meaning it affords businesses a certain level of freedom when it comes to making new hires. If it doesn’t quite work out with a particular freelancer, then the company simply won’t hire them again in the future. It’s also useful if you only need someone temporarily.

More broadly, hiring freelancers gives you access to a large range of skills, and this is where an online marketplace proves invaluable. So where do you start?
 

Access to a larger pool of available freelancers

While a lot of people like to bemoan the so-called digital age, it does mean we’re more connected than ever. Perhaps the most obvious advantage of using an online freelance marketplace is that it provides access to thousands – if not millions – of available freelancers looking for work.

This makes these online marketplaces ideal for quickly finding freelancers to complete one-time or rarely occurring tasks, and, again, you have the flexibility to trial as many people as you wish without being locked into anything long-term.

It usually won’t cost you, though some sites might charge a fee and/or charge the freelancer a percentage of their earnings.

Larger sites like Upwork and Guru will have the widest possible selection, though you might find there’s actually too much choice.
 

Access to a diverse range of talent

Not only do online freelance marketplaces give you access to many freelancers, but also to a huge range of valuable skills – skills which would probably be difficult for you to source locally, or even elsewhere online.

The majority of freelance marketplaces even allow you to filter your search for freelancers with the exact skills and experience level you need, meaning you can be sure you’ve got the right person for the job.
 

Ranking system

Another major advantage of hiring through an online marketplace is that it will most likely have some kind of internal ranking system. This is typically based on a number of key factors, including:

  • Feedback score
  • Reliability
  • Successful/timely task completion
  • Onsite tests
  • Money earned

Gone are the days of working your way through a mountain of CVs to try and (hopefully) find a half-decent candidate. With an online marketplace, the boring bit is taken care of, and you can focus on choosing the absolute best person for the role on offer.

You also don’t need to spend money on an agency which may not even do a good job.

After all, no one knows what you’re looking for better than you, and an online freelance marketplace enables you to take matters into your own hands and find reliable candidates with great reputations.
 

Simplified payment process

A common theme here is that online freelance marketplaces make things quick and easy, and the same is true when it comes to making payments.

There’s no need for an array of different payment methods (talk about confusing), as you can quickly and easily pay all of your freelancers via the online marketplace.

Most online marketplaces will allow you to bring over any existing freelancers you may use, so you won’t have the hassle of having to pay them the old way – or even potentially losing them for good in the process of switching to online.
 

Streamlined admin and communication

In the same way an online marketplace can simplify the payment process, it can help you manage both communication and work submission through its online workstreams and messaging systems. This can be helpful if you’re currently working through WhatsApp, and having to transfer work to a different device.

A lot of sites also feature inbuilt terms and conditions, which ensure you and your freelancers are on the same page when it comes to general expectations, as well as things like deadlines.

In addition to making your life as an employer easier, these terms give you a kind of safety net should anything go wrong, as you’ll have recourse to a third party (the marketplace itself).

 
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.