Do I Need to Offer a Wider Range of Services?

Do I Need to Offer a Wider Range of Services?

You don’t need us to tell you that in order to succeed as a business owner, you can’t stand still for too long. Evaluation and evolution are critical, so there may come a time when the best way forward involves offering a wider range of freelance services.

Expanding your offering can be a smart way to encourage business growth, get ahead of the competition, and stay relevant in your market. That said, it’s vital to be strategic about it.

We look at times when adding to your services could be a great idea, versus when you should probably hold off and address other areas first.

 

Reasons not to expand your freelance services

Adding more services isn’t the only way to attract or retain clients. Depending on your current offering, the answer to business growth might mean staying in your niche and honing your existing skills.

Although broadening your offering to include a wider array of skill can help you win more business, it’s important to make sure you can actually deliver on any new promises!

With that in mind, we want to focus on three key points to consider before making any big decisions.

 

Do you have the skills to offer?

It takes lot of hard work to win over freelancer clients and build up a reputation for reliability and high standards. Even if you’re not yet at that point, consistency is key. You want customers to have a good experience of working with you no matter which service you provide.

Offering a wider range of skills can be a smart business move, but if you’re not sure you have the skills or expertise just yet then perhaps learning, rather than expansion, should be your next step.

Educate yourself in the area you want to grow into and train yourself up before promoting it as a paid service. Launching when you aren’t adequately skilled puts your reputation, client relationships, and competitive advantage at risk.

You could even offer the service to existing clients for free, just while you’re learning, to refine your skills and gain experience. In other words, you could soft launch your new offering and gather feedback from clients so you’re on top of your game once you’re ready to launch in full.

 

Do you have the contacts?

Offering new services might mean you need to team up with specialists or experts in specific fields. If this is the case, but you don’t yet have the contacts to connect with, then it’s probably worth expanding your network before you expand the business.

When you find other professionals whom you want to partner with, it’s essential to get a feel for this working relationship before launching your new service. This gives you the opportunity to iron out any teething problems behind the scenes before you go client-facing with your new offering.

 

Do you have the time and capacity?

Skills and resources are vital when you’re thinking about offering a wider range of services to your clients – but so is time. If you haven’t got the capacity to execute the work involved, now isn’t the right time to expand.

For a new service to add value to your business, increase your profitability, and support your client relationships, you need to be able to give it your all – without burning out and damaging your work-life balance.

 

When to expand your services

We’ve explored three areas you need to have covered before you consider expanding your offering: skillset, contacts, and capacity.

So, if you’ve got the expertise, the right people for the job, and the available time, you could be primed and ready to offer a wider range of services and take your freelancing to the next level.

Here are some signs adding to your offering could be a smart move for your business:

 

Market demand is calling for something new

If your clients are regularly asking for services which you don’t yet provide, now would be a great time to widen your offering and plug this gap.

This is particularly important when considering your existing clients. Attracting new customers is one thing but losing your existing customer base is another.

Where there’s demand, there’s a need for supply, which suggests expansion would be an effective way to retain your clients, grow your business, and boost your revenue.

So, if your clients are asking if you can provide additional services or if you’ve noticed a market trend that you feel you should be diversifying into, go for it – providing you have the skills, resources, and capacity.

 

Your competitive advantage needs attention

Keeping a close eye on the competition is a crucial part of running a business at any stage. This includes regularly assessing what services they do or don’t offer – both provide invaluable insights that you can use to shape your own approach.

Which services or products have your competitors removed from or added to their portfolio? Which services seem to be the most popular in the case studies or client testimonials they share, or on their online reviews? What are your competitors winning market awards for?

The answers to these questions can tell you a great deal about the market you’re operating in and what your target customers are looking to spend their money on. Use this information to structure your unique selling points and enhance your competitive advantage.

 

You want to reach new business objectives

If you have specific goals or targets you want your freelancing career to reach, then adding to your services might be the way to unlock new milestones.

Monitor your current performance and use this data to identify where you need to level up, and how you’re going to go about it.

If you’ve got a financial objective that you’re working towards, for example, offering a new paid service to clients could be the perfect way for you to generate more income and reach this goal.

Ultimately, the decision to offer a wider range of services should be based on a thorough analysis of your skills, market, goals, and lifestyle.

It’s important to strike a balance between specialisation and diversification to align with how you want to shape your personal and professional future.
 
Find more of the latest news and guidance for freelancers in our info hub.

Where’s The Best Place to be a Freelancer?

Where’s The Best Place to be a Freelancer?

According to data collected by The Association of Independent Professionals and the Self-Employed (IPSE), there are now almost 2 million freelancers in the UK alone.

In fact, the Self-Employed Landscape Report revealed that freelancers make up nearly half (46%) of the country’s overall solo self-employed population.

The same research found that:

  • A significant proportion of freelancers live in London (24%) and the Southeast (22%)
  • Northern Ireland and Wales experienced the most notable decline in freelancers last year
  • London, Scotland and the Northwest saw the largest increase in freelancer numbers during the same time period
  • The West Midlands now comprises 7% of the UK’s freelance population whilst the Southwest represents 10%.

So, that’s what the UK freelance landscape is looking like right now – but where is the best place to be a freelancer? Let’s explore.
 

The world is your workplace

One of the most exciting things about building a freelance career is the freedom it affords you in terms of where you can work. You won’t be required to attend the same office in the same place each week, like you normally would if you were employed.

Important things to consider when plotting out your freelance life on a map include:

  • Cost of living and travelling in your chosen area(s)
  • Tax implications in those specific places
  • Your industry/field of work and the demand for what you offer there
  • Time zones – will these impact your ability to maintain client relationships?
  • Impact on your personal life and relationships

Of course, if you do fancy living the ‘digital nomad’ life and exploring the world while you work, you’ll also need to think about visas. Popular destinations that offer freelance visas are:

  • Germany
  • Belgium
  • Portugal
  • Spain
  • Cyprus
  • Brazil

All these locations welcome freelance workers, offering specific visas with time-based parameters or income-related requirements.

With the internet and modern technology, it’s possible to run a successful freelance business from almost anywhere in the world – it’s all about finding the place(s) that support your goals.
 

Freelancing online

Working remotely means you can connect with clients all over the world regardless of your own location – all thanks to the internet removing many geographical limitations.

So, if you’re a UK-based freelancer hoping for international work without needing to travel regularly or stray too far from home, the online world might prove to be your best bet.
 

Remote work

As a freelancer working remotely, the best place for you to be is wherever you feel most productive or wherever suits your schedule. This might be from a home office or a local cafe, the airport, or some far-flung exotic country.

That’s the beauty of remote self-employment and being your own boss – you get to choose where and when you work. You can even claim tax relief on your allowable home office running costs and travel expenses.

When it comes to finding work and reaching clients in the online world, freelance websites and social media platforms are going to be your best friends.
 

Freelance websites

There are lots of freelance websites and platforms which are designed to match gig workers with clients. On these types of websites, you will find digital ads calling for freelancers to fulfil jobs, which could be anything from a 30-second video voice-over to a three-month contract for a graphic designer.

These online spaces provide amazing opportunities to reach clients all around the world and the chance to work on projects you wouldn’t be able to access locally. Some popular freelance websites to check out are:

  • Fiverr: Easy to use with no joining or subscription fees. Advertise your service and wait for somebody to request a ‘gig’. You get 80% of the fee and Fiverr gets 20%.

    •  

  • Upwork: Sign up, create a profile and then actively bid on jobs posted by clients. Upwork is free to join and as of May 2023, the platform takes a flat 10% fee of what you earn.

    •  

  • PeoplePerHour: Clients can post jobs for freelancers to bid for, or freelancers can pitch packages for clients to consider. You apply for an account and once accepted, you get a set number of bids and quotes per month. You can buy credits to increase this allowance.

    •  

  • Freelancer.com: On this platform, clients list projects that freelancers bid for. The client then selects a freelancer to ‘award’ the job to. Freelancer.com has a selection of subscription bands that give you access to a range of bids and rewards. The platform takes 10% or $5 of the winning bid for fixed-price projects, and 10% for hourly charges, whichever is highest.

However, it is also worth looking in less densely populated online spaces to boost your chances of standing out. Some other great examples of freelance websites where competition might be a little less intensive include Flexjobs, Bark, Toptal, and Guru (which is specifically for voice over gigs).

Their global nature means competition for jobs can be pretty intense on these freelancing platforms, often leading to lower fees and tighter deadlines. Be aware, and ensure you aren’t overcommitting or underpricing your services when negotiating.
 

Social media

When running a freelance business online, using social media to build a client base can be an invaluable tool.

Social media might not be relevant for some freelance services, but it can have benefits for those that it suits. Professional channels like LinkedIn can be particularly fruitful when it comes to connecting with paying clients who need your services.

Here are some top tips to make your social media accounts work harder for you:

  • Pick your platforms wisely: Only use the social media channels that are relevant to your industry. For instance, a freelance finance consultant might have more difficulty finding leads on TikTok or Snapchat, so a different platform could be more efficient.

    •  

  • Search strategically: Use the search feature on social media platforms to find posts and conversations related to freelance opportunities. Target phrases like ‘hiring freelance [insert specialism]’ or ‘freelance job’ and set up alerts for these keywords too.

    •  

  • Make a good digital impression: Ensure your chosen social media profiles are complete, professional-looking and free of any grammatical errors or typos.

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  • Be active: Share regular content that is original, engaging and shareable to expand your reach and get your name out there. Posting examples of your work allows your online audience to get a taste of what you have to offer.

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  • Interact in the right places: Join and follow freelance job boards and groups on platforms like Facebook and LinkedIn. Clients will often post on job boards and social media groups so it’s a good opportunity to snap them up.

 

Consider your clients’ needs

Another important thing to remember when working as a freelancer is that some clients might require you to work from their base or office from time to time. This could be for ad hoc meetings or on a more structured, regular basis if you’re working under a contract.

Make sure you clearly establish if this is going to be the case from the very beginning so you can manage expectations about how much you can realistically commit to working on-site.
 
Find more expert advice and resources in our freelancer information hub.

Can I Freelance Whilst I Study for my Degree?

Can I Freelance Whilst I Study for my Degree?

Whether it’s to pursue a passion, expand a skillset or support themselves financially through their studies, some students turn to freelancing.

If you’re a UK resident attending a UK university, part-time freelancing is accepted as a great way to earn extra money and gain experience in a particular area.

But freelancing is not permitted if you’re an international student attending a UK university on a student visa. This is because of restrictions about the number of hours and type of work you’re allowed to do on this type of visa.

 

Benefits of freelancing while studying for a degree

The obvious advantage of freelancing while studying for a degree is that you can make some extra money to supplement your student loan. The benefits of running a side hustle while studying go way beyond making some extra cash though.

 

Flexible earning

Not only is freelancing a great way to open an additional income stream, it’s also an incredibly flexible way to earn money.

Many students take up part-time work in the retail or hospitality industries to earn extra cash, but part-time self-employment is far more adaptable than working for an employer.

Working for yourself means you can scale your workload up or down depending on how busy you are with your studies, and ensure your university deadlines and freelance deadlines never clash. Contracted employment hours and shifts can be far more rigid.

 

Practical experience

While working in retail or hospitality is a proactive way to support yourself financially as a student, freelancing in your chosen industry is a great way to get ahead professionally while earning at the same time.

Many industries evolve rapidly so if you’ve been freelancing during your degree course, you’ll be able to hit the ground running post-graduation with practical skills and actionable knowledge of the sector.

It will also give you a competitive advantage in the professional market.

If you want to start applying for jobs, your freelance experience will boost your employability as you’ll already have a portfolio of freelance work to support your applications.

If you want to continue freelancing and turn your side hustle into a full-time business, you will have solid self-employment foundations to build on.

Plus, what you learn through your freelancing can also have mutual benefits for your academic work, hopefully boosting your grades.

 

Building contacts

While you’re out gaining experience in the professional world alongside your studies, you also get the opportunity to meet people in your industry and make connections.

Just like skills and a portfolio, this will support your employability once you start looking for a job post-graduation. Or, if you plan to freelance full-time or start your own business after university, these connections can form the start of your client base.

 

Establishing strong work ethics

Part-time freelancing while studying is a great way to get a feel for what the working world is like without having to dive right in at the deep end.

Freelancing exposes you to things like client communications, time management, and negotiating costs – all of which are incredibly useful soft skills for a graduate.

Balancing a side hustle with your academic studies also teaches you valuable lessons about discipline, organisation, and striking a healthy work-life balance.

 

Things to consider as a side-hustling student

Before kick-starting your freelance side hustle whilst you study, there are some important things for you to think about in order to manage expectations and ensure you’re not spreading yourself too thinly.

 

Impact on your studies

First and foremost, it’s vital to make sure that your freelance work doesn’t get in the way of your academic studies. Only commit to a realistic number of hours or projects and leave adequate time and head space for your degree.

The beauty of freelancing is that you can adapt your workload in between semesters. So, when your university work is more intensive, you can focus less on side hustling. In your academic breaks, you can ramp up your freelance work if you want to.

 

Uncertainty around earnings

Employment might be rigid and inflexible in terms of time, but it is pretty stable when it comes to weekly or monthly pay. Freelance work, on the other hand, is less reliable as you will be counting on clients to pay their invoices within the agreed terms.

Clients sometimes miss payment deadlines and it’s up to you to chase them to settle their bills. This can be stressful and eat into your valuable time.

Only work with clients you know are going to pay their invoices on time and not add to your to-do list (or stress levels).

 

Finding freelance work

Completing work is one thing but sourcing gigs and maintaining client relationships takes time and effort. Even sending emails back and forth to sign off prices, discuss amends or arrange meetings is time that pulls you away from your studies.

Applying for freelance jobs and preparing your portfolio to present to potential clients can also be super time intensive.

Make sure to factor all of this in before agreeing to any work. It’s important to be open and honest with your freelance clients too, so that they’re aware of your situation and that sometimes, your studies will have to come first.

 

Do students have to pay tax on freelance work?

Yes, all of the same tax rules apply to students who earn money through self-employment alongside their academic studies.

This means you need to pay personal income tax on any taxable earnings you make through your freelance side hustle.

You can earn up to £1,000 from self-employment in a tax year before you need to register with HMRC and report your income. After that, you may need to sign-up for Self Assessment so you can submit a tax return each year and pay what you owe.

The Personal Allowance means you don’t have to pay income tax on the portion of your earnings that fall below the current £12,570 threshold.

Your student loan and things like bursaries, grants and scholarships are normally tax-free and therefore don’t typically contribute to your Personal Allowance.

If you make money from selling goods and services overseas, you might also have to pay taxes to other countries as well.

Dealing with your accounts takes time and energy too, so just make sure you’re realistic about what you can take on alongside your degree.

 
Find even more advice and guidance for freelancers in our handy info hub!

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Can I Freelance After I Retire?

Can I Freelance After I Retire?

For some people, retirement plans include travelling to bucket list destinations, investing time into new hobbies, or home renovation projects that have been neglected for many years. It’s a chance to leave behind the world of work altogether and turn their attention to other things entirely.

For others, retirement is the perfect time to focus on a post-employment freelance venture. This could be continuing a freelance side hustle that is already up and running, or it could mean venturing into the world of freelancing afresh. There’s absolutely nothing to stop you freelancing once you reach retirement age, or even if you take early retirement.

We explore the benefits of freelancing after retirement and share our advice on things like tax liabilities and marketing your freelance services.

Should I start freelancing once I retire?

OK, so you can freelance, but should you? There are plenty of benefits depending on what you’re looking to get out of it.

Nurture your passion

Just because you’ve reached retirement age, it doesn’t mean you should give up doing what you love or what you’re good at. If you’ve still got energy and expertise, freelancing is the ideal way to go about it.

Earn extra income

As well as continuing to do something you love or exploring an untapped talent you’ve always had, freelancing is also a great way to earn extra money. It can be lucrative too.

Plus, freelancing is a far more flexible way to generate income. You can scale your workload up or down depending on your personal schedule, without having to commit to contracted employment hours.

Better wellbeing

Retirement is a cause for celebration, but it can also be a common trigger for anxiety and depression.

Leaving a life’s career behind can cause people to feel like they’ve lost their sense of purpose, which can lead to feelings of grief too. Plus, leaving employment behind can also come with financial stress.

Freelancing not only provides an extra stream of income, but it also reinstates a sense of purpose. This will support better mental stimulation, happiness, and improved physical health too.

You’re off the National Insurance hook

Once you reach State Pension age, you stop paying Class 1 and Class 2 National Insurance contributions (NIC). This is true even if you’re still working.

Class 1 relates to the NIC paid through employment, while Class 2 refers to the NIC paid through self-employment.

This means you get to keep more of your freelance earnings post-retirement than you would have done before reaching State Pension age.

Note: you will need to carry on paying Class 4 contributions until the end of the tax year in which you reach State Pension age.

Will I pay income tax if I freelance after retirement?

You might not be liable to pay National Insurance contributions once you reach State Pension age, but you may need to pay tax on your freelance earnings.

The good news is that everyone is entitled to the Trading Allowance, permitting you to earn up to £1,000 from self-employment in a tax year before you need to report it to HMRC or pay tax.

After that, you’ll need to register for and submit Self Assessment tax returns so you can pay Income Tax on any earnings over the (tax-free) Personal Allowance.

The current Personal Allowance threshold is £12,570, which means you don’t need to pay any Income Tax on the first £12,570 you earn.

Your Personal Allowance encompasses all sources of income, so your total income will include:

  • State Pension
  • Private pension (although some of this can be taken tax-free)
  • Self-employment earnings (e.g., freelance income)
  • Taxable benefits
  • Income from property
  • Investment earnings

Any income above the £12,570 allowance will be subject to tax. You are responsible for reporting these earnings to HMRC and paying the necessary taxes.

How to promote freelance services

So, you’re excited to take on post-retirement freelancing – but how do you go about sharing your offering with the world? Whether you’ve got a pre-established client base or not, here are some quick tips on how to market your freelance services successfully.

Be active on social media

Social media is one of the most effective ways to expand the reach of your offering and be an active part of current conversations in your industry.

These days, many people also use social media as an additional search engine so if people are searching for an expert in your field, being present online will help them find you. It’s also a great place for customers to share their reviews and recommendations.

Don’t think you need to be active on every single platform though – go where your customers are and speak to them in their language. If you’re a freelance financial advisor, for example, you might find it harder to target your audience on TikTok.

Consider setting up a website

This won’t be necessary for the operation of every freelance service but for some, a business website can be an invaluable tool. If you’re a freelance copywriter or wedding photographer, for instance, a website is the perfect place to collate examples of your work and explain pricing structures.

Attend online and in-person events

Getting out there and meeting people is a tried and tested way to find new business. There are stacks of digital events to attend online these days but don’t forget about good old-fashioned, face-to-face networking too.

Encourage word-of-mouth referrals

Ask clients to recommend you to their contacts, share your content on social media, and write testimonials for you to share on your own channels. Customer recommendations are a powerful force when it comes to finding and retaining business.

Find more expert advice and resources in our freelancer information hub.

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Freelance Christmas Side Hustles

Freelance Christmas Side Hustles

Christmas really is the most wonderful time of the year, but it’s also one of the most expensive. There are extra costs coming at you left, right and centre, not helped, of course, by the increased cost of living.

If you’re looking for extra funds to support your seasonal spending this year, you might consider setting up a freelance side hustle to help you generate some additional income.
 

Ways to make cash for Christmas as a freelancer

If you have some spare time outside of paid employment and would like to make some extra spends in time for the festive period, here are some cool ways you could go about it.

 

Sell seasonal products on Etsy

If you got a penchant for arts and crafts or a creative skill left untapped, now is the perfect time to let it shine by making seasonal products to sell online, such as:

  • Greetings cards
  • Thank you cards
  • Scented candles and wax melters
  • Hand-decorated baubles
  • Handmade wreathes and garlands
  • Personalised decorations
  • Personalised Christmas Eve boxes for children
  • Plates to leave snacks for Santa and Rudolph on
  • Knitted hats, scarves, and gloves
  • Handmade crockery
  • Balloon arrangements

These are just some common examples of what people create and sell around Christmas time to make some extra money. However, get your creative juices flowing because the more unique your seasonal product, the more likely you are to stand out in the market and sell.

Top tip: don’t forget to factor seller fees into your budget and expenses if you are going to use ecommerce marketplaces like Etsy, Amazon, or eBay.

 

Sell edible festive treats

Two hot commodities you know are sure to sell, especially during the festive season when people are drinking and being merry, are food and drink. People are more liberal around Christmas time with their calories and their cash, which is a lucrative opportunity for you.

Examples of edible treats you could make and sell include:

  • Christmas cookies or cupcakes
  • Festive flavoured fudge
  • Homemade Panettone
  • DIY cookie or cupcake jars
  • DIY hot chocolate sets with all the trimmings
  • Gingerbread
  • Edible wreaths made from sweets
  • Food and drink hampers

Get creative with it – just make sure you comply with all the necessary health and safety regulations if you are going to go down the food or drink route.

Be sure to check out the legalities before you stock your pantry, so you don’t end up in a sticky spot of trouble with lots of costly ingredients left on your hands.

 

Turn the jobs nobody wants into extra cash

Christmas is a time when many people want to kick back, relax, and forgot about their to-do lists until the new year. This is the perfect opportunity for somebody looking to earn extra money to strike by offering to do the tasks nobody wants to do in exchange for payment.

This includes things like:

  • Picking up and dropping off Christmas trees
  • Putting decorations up and taking them down
  • Present wrapping
  • Trips to the tip to get rid of cardboard boxes and other junk
  • Housesitting while people are visiting family and friends elsewhere
  • Dog-sitting while people head off on last-minute holidays

It goes without saying that, in order to offer any ad hoc services like these, you need to make sure you’re able to do so safely and legally.

Do some research to make sure there aren’t any qualifications or safety checks you need to have passed before starting anything as a freelance side hustle.

 

Turn your skill into seasonal spends

The world of business doesn’t stop just because Santa is coming to town, which means your Christmas side hustle doesn’t necessarily have to be Christmas-related at all.

If you have a skill that you could be putting to use to generate an additional income stream in time for the festive period, there’s no time like the present. If it goes well and you see success, you could even continue your side hustle once Christmas has passed.

That said, even if you have a non-festive skill up your sleeve, there are ways you can capitalise on the season to upsell or attract new customers.

If you’re a freelance photographer, for example, you could pull together a limited-time service where you offer families Christmas-themed photoshoots for things like greetings cards and calendars.

It doesn’t have to be creative either. If you’re a plumber, for instance, you could offer a discounted service to check pipes and plumbing during the cold season when people often experience issues with freezing and water pressure.

Or maybe you’re a freelance wedding planner wondering how to make some money during the quieter wedding season. You could transfer your organisational skills and contacts list to Christmas or New Year party planning instead temporarily.

 

Don’t let taxes tarnish your festive spirit

No matter what your side hustle is, you’ll need to let HMRC know about it if your total self-employed income is more than £1,000 in a tax year. Anything below that threshold is covered by the trading allowance, which enables you to earn up to £1,000 through miscellaneous means (e.g., Christmas side hustles) without having to declare it or pay tax on it.

If your earnings go above the threshold, you’ll need to register for Self Assessment and submit a tax return. Fortunately, you can still offset the allowance against your earnings and only pay tax on anything above the threshold, or you can claim tax relief on your expenses instead.

How much tax you pay will depend on your overall income for the tax year, including what you earn from your main income source (i.e., employment), although you won’t need to pay tax on the same income twice. And no, your employer won’t find out unless you tell them!

 
Find more of the latest news and guidance for freelancers in our info hub.

How Do Freelancers Pay Tax?

How Do Freelancers Pay Tax?

The nature of being a freelancer means that you’re self-employed, and therefore not paid by an employer who will make tax deductions on your behalf through the Pay As You Earn (PAYE) system.

Generating your own income from self-employment means you’re also responsible for paying your own tax and keeping HM Revenue & Customs (HMRC) up to date with your financial situation.

How you pay the tax you owe on your freelance earnings depends on how you are set up as a business.

For most freelancers this usually means operating as either a sole trader or as a limited company. These structures have different rules for reporting and paying tax (as well as different tax rates) but because they’re the most common options, we’ll go over both.
 

Paying tax as a (freelance) sole trader

If you’re set up as a sole trader, you will need to submit an annual Self Assessment tax return online or through the post and pay Income Tax on your freelance earnings. This is the most popular route for self-employed freelancers to take (but other options are available!).
 

Submitting a Self Assessment tax return

There are different deadlines depending on whether you submit your Self Assessment tax return online or through the post.

HMRC is encouraging all taxpayers to file returns digitally moving forward (as part of Making Tax Digital) but for now, paper returns are still accepted.

If you submit a paper tax return, the deadline is 31st October following the end of the tax year being reported. If you submit an online Self Assessment, you have a little longer, until 31st January.
 

Paying Income Tax

After submitting your tax return, you’ll receive a tax bill detailing how much you owe in Income Tax and National Insurance.

Your tax bill can be paid:

  • Online through your account with HMRC by debit or corporate credit card
  • Via Direct Debit
  • By approving a payment through your online bank account
  • Telephone bank transfer
  • At your bank or building society
  • By cheque via the post

You also have the option to pay your tax bill through your tax code. Taking this option means your tax code will change, and your employer will deduct the tax you owe for self-employment alongside your usual deductions. It might be something to avoid if you don’t want your employer to know you’re self-employed! This is only available if:

  • You owe less than £3,000
  • You already pay tax through PAYE
  • You submitted your paper tax return by 31st October or your online tax return by 30th December (a little earlier than the usual 31st January deadline for online submissions)

 

Making payments on account

If your tax bill comes to more than £1,000 then you might also need to make payments on account. This is where HMRC ask you to make advance payments towards next year’s tax bill, based on predictions of what you are likely to earn.

These are paid in two installments and need to be paid by the following deadlines:

  • First installment – 31st January (the same deadline for paying the current year’s tax bill)
  • Second installment – 31st July of the same year.

 

Paying tax if you’re set up as a limited company

If you’re set up as a limited company, you will need to submit an annual Company Tax Return and pay Corporation Tax on your freelance earnings.

The deadline for filing this type of tax return is 12 months after the accounting period it covers has ended.
 
Paying Corporation Tax

Once you have submitted your Company Tax Return, you will then be informed how much Corporation Tax you need to pay.

If your taxable profits are below £1.5 million, this needs to be paid within 9 months and 1 day of the accounting period ending.

If your taxable profits exceed £1.5 million, you will need to pay your tax in installments, each with their own separate deadlines.

Can a freelancer claim tax relief on expenses?

Yes, just like any other business, freelancers are allowed to claim allowable expenses as tax relief against their bill, helping to keep your tax bill down!
 
Common examples of allowable expenses freelancers claim include:

  • Work-from-home expenses (such as a portion of your rent, utility bills, internet connection, etc.)
  • Business-related supplies and equipment (laptop, printers, software, stationery)
  • Work-related travel costs (tickets, hotels, food and drink)
  • Professional services (solicitor, accountant, etc.)
  • Marketing and advertising costs (business cards, web hosting fees)
  • Membership fees and subscriptions

Any expenses you claim need to be directly related to your freelancing work and necessary to the operation of business-related activities.

Remember to keep receipts and documentation to support your claims, just in case you ever need to produce them for an audit!
 

Find more expert advice and handy resources for freelancers in our info hub!