Going Freelance Support Pack

1. Thinking About it…

1.1 Why do it? What will you do? What is your USP?

Why do I want to go freelance? Everyone will have their own reasons - more control over work/life balance, test it out alongside an existing role etc. Many people hold themselves back by the fear of the unknown (we’ll come back to this).

What type of work do you want to do? Do you want to utilise some or all of your existing skills and experience, or do something new? Is there something you don’t want to do?

What makes YOU stand out (your unique selling point (USP) - being freelance is all about selling yourself)? It may be experience in a particular sector, working with specific records etc.

Why do I want to go freelance?

At some point when considering whether to go freelance you will start to think about the pros and cons of such an important decision. The list below comes from The Times Guide on How to become a Freelancer

The Pros

• Freedom to choose what work you’ll do and when

• Better work-life balance

• More variety in the types of freelance jobs you take on

• Ability to be more creative

• No office politics or bad bosses

• More responsibility over my career

• Opportunity to earn more money

• Fits in with family or other commitments

For many people the Pros or Cons presented above may actually be the reverse. The reality of course is that there are no guarantees that you will not come across bad clients – and every freelancer will have a wealth of horror stories (but that is another story/event 😊).

Another approach might be to undertake an analysis of your personal strengths and weaknesses and the opportunities and threats that you believe your business might face. Think about the skills and the knowledge you have but also your values and motives. This isn’t the time for modesty – be as objective as you can and don’t be afraid to ask colleagues what they think.

Resources

Start with Why, Simon Sinek’s TED talk [over 17million views]

Simon shows that leaders who’ve had the greatest influence in the world all think, act, and communicate the same way—and it’s the opposite of what everyone else does. The book provides a framework on which organisations can be built, movements can be led, and people can be inspired. https://www.youtube.com/watch?v=2Ss78LfY3nE

 Finding your USP Consider your personal brand - what sets you apart from others?
What Successful Freelancers Wish They'd Known From The Start

1.2 The Finances

A Business Bank account is a must

Consider accounting software like Quickbooks, Xero, etc - it saves time and is a chargeable expense. YOU choose invoicing system (single sequence; year/number etc) keep track of invoices raised/paid.

Be aware of the delayed payment of tax - it could be many months after the payment was earnt.

You should consider a pension - there are some designed for self-employed workers that allow you to vary the amount you pay in (eg if you want to put a percent aside of income each month)

You will need Professional Indemnity Insurance (minimum of £1m cover), some clients also ask for Public Liability Insurance but you don’t need Employer Liability Insurance (unless you are employing people)

If you have costs/bills to cover be aware that payments will be irregular (see section 3.3)

Most of the apprehension that people have about going freelance include the key questions How much should I charge?  The other main question - How to find work is something we will look at later (s2.2 and s2.3).

What type of business do I want to create?

In thinking about going freelance an important decision relates to the type of business you will be forming. The two main options are sole trader or a limited company, the key differences between the two are detailed below (from The Times Guide on How to become a Freelancer).

Sole Trader

You are the business

If you decide on the limited company route you also need to decide the name of the business. As part of this process look to see if you can legally use the name, whether an appropriate web domain is available and what currently appears if you search for that name or term.

If you are planning to go freelance in the future, if possible try to put aside between 2 and 6 months of your living costs. It takes time to establish yourself and then be paid for the work.

Business insurance

Once you have a business you need appropriate business insurance cover and many clients ask for confirmation you have such insurance. This protects you and the client if things go wrong. Professional Indemnity Insurance (£1m cover is the minimum I would recommend). A small number of clients may also ask for Public Liability Insurance. You don’t need Employers Liability Insurance (unless you are employing people).

How much should I charge…?

A key question when starting as a freelancer is deciding how much to charge a client - and whether it will be £xx per hour, £xx per day or £xx for a set task. This is partially dependent on the task – if you are transcribing a document charging per page makes sense but less so for work to catalogue a collection.

Simply converting what an employer pays for a particular role – eg project cataloguing archivist doesn’t equate. The employer would pay you to have time off (annual leave), sick pay and would make NI and pension contributions; they might contribute to your training and professional development and would be expected to pay for stationery, ICT equipment etc etc

Being self-employed you are responsible for the administration/paperwork including raising invoices, paying bills, sorting out your taxes. You need to order (and possibly build) office furniture, install software, promote yourself, create and maintain an online presence that may include a website and social media channels, you need to pay for equipment and for training/professional development. When opportunities arise you need to submit a proposal. All of this takes time and we haven’t done anything we can charge somebody for.

You don’t get annual leave, bank holidays or sick pay - your rate needs to cover the risks/costs of being freelance.

If you want to earn £40k a year and you charge £400 a day you’d need to work 100 days a year.

You could calculate your availability

There are 52 weeks in a year, allow 5 weeks for annual leave, leaves 47 weeks

• if you are working 5 days a week that equates to 235 working days a year

• if you charge £400 per day this means you could potentially earn £94k a year.

The reality is that you will need to spend time to write proposals, even with the best of intentions working 8 chargeable hours a day is unlikely. Plus life gets in the way. 

The ARA Guidance for archives, records management and conservation freelancers includes some suggested calculations but the estimates are on the low side. There is a distinction between capacity type roles for example cataloguing and the more strategic roles that require higher levels of experience or knowledge.

Charging tips

1. Find your preferred way of logging your time – whether via a dedicated app like Toggl or some other method. Managing your time becomes more complex (and more important) once you start juggling multiple clients.

2. I use a MS Excel spreadsheet based on a calendar template, each month is a distinct worksheet and I note time and activity for each day adding time for future meetings and activities as soon as they are added to the diary. This means I can provide a client with both a break-down of time spent and time remaining.

3. There is always a risk that a task you expected to take you x hours/days takes twice as long. Hopefully this will be balanced by tasks you feared would take y hours/days are done in half the time. IF you are comfortable discussing this with your client do so (but sooner rather than later), if you decide to say nothing allow more time next time.

4. As you repeat tasks you will gain more awareness of the time it takes, or learn short-cuts/software that makes it so much easier/better. I now have preferred go-to tools for most tasks so my time is spent on chargeable activities NOT learning new software.

 Traditional vs cash-basis accounting

There are two basic accounting models you can adopt, lets take an invoice dated 2 April 2024 that is paid a week later on 9 April 2024 to see the differences..

1. Traditional – you record income and expenses based on the invoice/billing date. 
   In this case the invoice falls within the 2023-2024 tax year [although you get paid one week later it falls within tax year 2024-2205].

2. Cash- basis – you record income and expenses when you are paid or pay a bill. 
   In this case you would record the invoice once it has been paid, ie in tax year 2024-2205.

 HMRC recommend cash basis as being appropriate for the majority of businesses with an income below £150,000. The traditional model is recommended for businesses that handle and sell-on stock and where expenditure and income is more complex. 

VAT

As a sole trader you are exempt from VAT whilst your income remains below £90k for a rolling 12 month period (as of April 2024). This is an important element in the cost to the client, I always state clearly – “VAT is not applicable”.

The tax year and payment on account

The 2024-2025 tax year runs from 6 April 2024 through to 5 April 2025.

• You must submit your self-assessment tax return for 2024-2025 by 31 January 2026

• You must pay the tax due for 2024-2025 by 31 January 2026

The first tax year is usually quite straight-forward, the very useful HMRC ready-reckoner can help you estimate the likely tax that will be due. Note - this is based purely on income, the actual self-assessment process deducts your allowable expenses from your income before calculating the tax due.

As you move into your second year of business the ’payment on account’ process begins:

Once it has calculated your tax bill for 2024-2025 HMRC assumes your income for 2025-2026 will be the same and splits this figure into two equal payments and asks for a pre-payment of this anticipated tax bill, so for 2025-2026:

• A first ‘payment on account’ is due by 31 January 2026

• A second 'payment on account’ is due 31 July 2026

• Any final balancing payments (if your income  is higher or lower than the previous year) will be calculated when completing your return (by 31 January 2027 at the latest)

You can see your statement at any time via your HMRC self-assessment account (using your Government Gateway ID and password) this will detail payments made and due.

Paying your taxes

Being self-employed means that you are responsible for calculating and paying your taxes. Don’t be afraid of the self-assessment form/process it is quite straightforward if you have kept a comprehensive record of your income and expenditure. A key advantage of using a commercial package is that it encourages you to categorise each transaction as it is added – this allows the software to prepare the data for the self-assessment form.

You could leave the self-assessment form to the last day – 31 Jan 2025 to submit your return for the financial year April 2023 – March 2024. But what if there is a system glitch? If you miss the deadline there is a financial penalty to pay (currently £100 if less than 3 months late). I have got into the habit of doing this a few weeks after the end of the financial year – eg mid April 2024 for the financial year April 2023 – March 2024. This doesn’t change the amount of tax I have to pay but gives me more time to manage my cashflow.

Manage your cash flow tips

1. Being paid is wonderful – but this is not a lottery win! Carefully review your expenditure and future expenses before your next pay day and don’t forget to put money aside for pension and the taxman.

2. Martin Lewis suggests “For every £100 I’m paid, £30 isn’t mine." Then EVERY time you get paid, put the tax cash into a separate high interest savings account. That account shouldn’t be thought of as yours, you need to consider it "the taxman’s account". 
   But remember your personal savings allowance varies according to your earnings: 
   * Basic-rate (20%) taxpayers: can earn £1,000 in savings interest per year with no tax 
   * Higher-rate (40%) taxpayers: can earn £500 in savings interest per year with no tax 
   * Additional-rate (45%) taxpayers: £0 – they do not get an allowance.

3. When I secure a commission I project forward when I expect to receive the income – this might be split into two payments on start and completion of the work, a series of monthly invoices or for smaller amounts a single payment at the end of the commission.

Invoices

There are many examples of a simple invoice template – keep it as simple as practical. Provide the information in a clear manner to allow respective colleagues in finance departments to read, get the information they need and then move on!

You do get to choose the basis of your invoicing system, this might be 001, 002 or 2024-01, 2024-02 or something else. I decided to adopt a client 3 or 4 letter code followed by a sequential number – eg ARA-01. This makes it easier for me to find invoices relating to a particular client. It also means I can draft invoices ahead of time – and then review the details before sending it.

With many of my clients being charged a month in arrears, eg an invoice raised on 1 May will relate to work undertaken in April (and should with any luck be paid by the end of the month). I also try to avoid sending invoices for small amounts – so sometimes I roll-over an invoice to cover 2 months but clearly state that it relates to work between date 1 - date 2.

Invoice tips

• Keep your key business and banking information to hand. Each new client is likely to ask you to complete a new supplier form so that you can be added to their payment system and raise a purchase order to pay you.

• Check the details on the purchase order, this will often include information on who to send the invoice to and what information must be included for the invoice to be paid

• Don’t be afraid to ask about payment and invoices at the outset – these processes will take time. This is also a good reason to consider asking for staged payments for longer projects, once the first payment has been processed the others should be ok.

• If there is a financial deadline, eg payment needs to be by x date, seek clarification about when the invoice(s) need to be raised to meet this deadline

Resources

HMRC / payments in advance

• Familiarise yourself with HMRC guidance on allowable expenses, cash basis for simple accounting, the Ready-Reckoner to estimate the tax that might be due and step-by-step guides covering self-employed ('sole trader'), limited company and business partnership

• Making Tax Digital for Income Tax Self Assessment from April 2026 (income £50k+) and April 2027 (income £30k+) places considerable emphasis on keeping a good record of your income and expenditure.

Business types (sole trader/ltd company)

• https://smallbusiness.co.uk/structure-sole-trader-limited-company-2543815/

• https://www.creativelivesinprogress.com/article/a-guide-to-setting-up-as-a-freelancer

  The HMRC YouTube channel includes a number of playlists relating to self-employed, self assessment with a number of easy to follow and focussed videos

Calculating day rate

• https://www.contractorcalculator.co.uk/contractorcalculators.aspx

• https://smallbusinesstoolbox.uk/starting-business/how-much-should-i-charge/

Pension

Self-employed pensions offered by PensionBee, Penfold etc and the guide produced by the Federation of Small Businesses How to set up a self-employed pension

Self-employed pension tax relief - you should automatically get a 25% tax top up from the government on pension contributions. So if you pay in £100, the government effectively adds £25 to your pension.

1.3 The Reality

• 8 Chargeable hours a day is very rare (6 would be very good) - unless you are cataloguing an archive you are likely to have lots of distractions.

• I’ve had the chance to work on a wide variety of projects (a key appeal to me for archives as a career)

• Keeping tasks/projects from overlapping is nigh on impossible despite your best intentions

• You are always wearing multiple hats HR/Marketing/Finance/ICT + investing time in your skills and CPD

• How do you like to organise yourself?

• Record the time spent for each client - some use Toggle ap. I use a simple MSExcel spreadsheet and ClickUp software designed for teams but I use it as a team of 1; this allows me to manage tasks for client, tasks for CPD (all on one diary), jobs applied for, invoices raised/paid.

• All clients think you are working 100% for them ONLY - even if you are only working a few days a month.

IPSE

IPSE (Association of Independent Professionals and the Self-Employed) is the UK’s only not-for-profit association dedicated to the self-employed.

IR35
IR35 refers to the rules designed to stop contractors working as ‘disguised employees’ – ie all contractors who don’t meet HMRC’s definition of self-employed. HMRC have created a tool to determine your status for tax – some clients may ask you to do it and share the results.

Resources

IPSE provides regular webinars on a range of topics. Members can access document templates and contracts in its Library. Freelancer membership of IPSE (currently £260 pa) or Community (currently £10 per mth).

https://www.ipse.co.uk/member-benefits/ipse-advice/new-to-self-employment/how-to-avoid-legal-issues.html

Freelance Corner IPSE podcast: THE FREELANCE PODCAST - Being Freelance community podcast 

2 Doing it…

 2.1 Registering as Self-Employed

You should register with HMRC as soon as possible - technically you can wait until you know you will earn more than £1,000 in that tax year.

This will mean you get your ten digit Unique Taxpayer Reference (UTR) number

You will also be registering for Class 2 National Insurance contributions if your income is*:

Below £6275

2.3 Being Found

• ARA List of Consultants

  • some clients use this to contact you directly

  • contact the ARA office for the simple form to be completed - they then add you to the list (you do have to be a member of ARA)

• Website

  • I included the words I thought people might be using to search for someone with my skills

  • an important tool (for me) with a surprising number of direct contact approaches through the contact form on the website (though it is not always clear if they are approaching just me or multiple people). I try to respond to these approaches in a timely manner, asking for more info and possibly a call

• LinkedIn - no direct leads but some clients do look before making an approach.

For the last 20 commissions I have secured, 4 came from a tender process and the rest from direct approaches.

Being ready

As well as the financial side of things it is important to get yourself ready. If you have registered a web domain, can you use a domain specific email address – rather than a Google email. This looks professional and allows you to keep work and personal life distinct.

Setting up a dedicated space for working that has the space and the ICT that you need. Whilst there will be some things you need from day 1 – the list of software needed will expand as the work and the variety of tasks expands. You can also be canny, if you use Microsoft 365 you can buy a license code on Amazon – put the item on a wish list and keep an eye on the price. It is not unusual for 60%+ discount to be offered, allowing you to buy it when it is cheap and then use the code when your current license approaches renewal.

For example I use Typeform software for research surveys and consultation. Instead of paying for an annual account which I might only need for two months I have a free account that I then pay to upgrade when I need to and then resort to a free account when the consultation is complete. I know there are alternatives but I now have a library of previous questionnaires and surveys making each new survey much quicker to get up and going.

Develop a style and tone for your brand – even simple aspects like selecting a font/colours to use. Develop a template for key documents like your tender proposal and invoices. Spending the time on the first few will save a lot of time down the line.

3. Reflecting on it…

3.1 Freelance mindset (thinking like a business)

Thinking like a business

When you are busy, looking out for the next project/opportunity doesn’t seem like a priority, but remember, no-one is looking out for you.

Nudging a client about payment/purchase orders is important. If I send an invoice on 1st March, I would hope to be paid on 31st March. If I haven’t heard (many client payment systems send payment advice to say a payment is on its way) I might contact the finance department on 3rd April to check there isn’t a problem.

I always send emails/reports etc that I would like to read; succinct with links to further information. Help reader(s) by not being too technical and think about their likely familiarity with what you are talking about. Use case studies to show how others have approached the same issue/challenge.

Different hats at different times

• Sometimes you need to be efficient and get the job time

• Occasionally your client might not be familiar with archives and the ‘fundamentals’ that we take for granted, so you may need to switch into coach/mentor mode

Thinking like a business needs to become a mantra alongside the recognition that if you don’t do something nobody else is on-hand to pick it up. Review and reflect on the tasks that you relish and enjoy and those you actively seek to avoid. 

There are forums and groups for freelancers on Facebook and LinkedIn like the Group for Education in Museums Freelance Network. Some of freelance groups advocate cold calling potential clients which is prevalent in some sectors but not archives (as far as I am aware).

Resources

Nick Kyriakides article - The Ultimate Guide To A Successful Freelancer Mindset his website includes a number of free resources to download.

Matt Saunders Stop Thinking like an Employee, and Boss Your Business!

Michael Bungay Stanier  - although they are not written for freelancers both The Coaching Habit and The Advice Trap books are useful in making you think/review/reflect on what you are doing and why.

3.2 Confidence (imposter syndrome)

• Imposter syndrome = I don’t have all of the skills they are asking for

  • Consider contacting the client to discuss the opportunity? (some encourage it / some discourage it)

  • I’ve got some contracts through pre-application conversation - some briefs are unclear/vague, so a conversation allows you to ask specific questions and consider whether you want to work with them.

• Don’t forget YOUR continuing professional development, are there skills you can acquire/develop? There are many free webinars to increase awareness of current projects/initiatives

• Be prepared for rejection - each tender is like an interview

  • some clients select/appoint purely on the tender submission - some shortlist and interview

  • you can’t control who else goes for an opportunity (it is the client who decides)

  • seek feedback from each unsuccessful bid (sometimes it will be fair, sometimes not

Treating rejection as an opportunity for feedback

It is always disappointing to not secure a commission - being self-employed it will feel much more personal than a traditional job interview process. Use it as an opportunity to ask for feedback – it might be price, your availability, a mis-understanding of something they read (or couldn’t see) in your proposal. It all provides an opportunity to refine your language, your pitch.

Resources

Imposter Syndrome / Confidence Gremlins

Squiggly Careers – podcast where Helen and Sarah talk openly about their experiences, reflect on what worked (and what didn’t) and suggest tips and further reading on the topic

• https://www.amazingif.com/listen/ask-the-expert-ambition-with-shellye-archambeau/

• https://www.amazingif.com/listen/how-to-build-your-self-belief/

• https://www.amazingif.com/listen/how-to-cage-your-confidence-gremlins/  [a gremlin is a belief that holds you back]

The AmazingIf website lets you browse and search 400+ podcasts and the supporting PodSheet which features key questions and further resources

3.3 Flood and Droughts of work

• When you start the big worry is ‘who will hire me’. After your first client this becomes ‘where is my next contract going to come from?’

• Some opportunities come at the worst time - eg when you are very busy

• Some projects might take weeks to get off the ground - for one project there was a five month delay before the purchase order was raised.

• Project your know income and your known expenses (HMRC)

  • Some clients may pay monthly in arrears, some at start/end of project

  • Don’t be afraid to make reasonable requests about being paid

  • Smaller amounts (less than £1k) I invoice on completion, for larger projects I ask for monthly payments.

Perceptions

Don’t think of a gap between projects as a drought – but perhaps an opportunity to focus on your skills and CPD or take a break.

Where possible and practical look ahead whether that is the next two weeks or the next two months – whatever makes sense to you. Look to identify potential peaks and troughs of activity and look to see if a more manageable balance is possible. Most peaks and troughs will be because of client issues – deadlines brought forward, changes in scope or remit. The week before Christmas is unusually quiet – so a good time to catch-up on admin, refresh your website or social media profiles or look ahead to see what January looks like.

Resources

Article from the Creative Lives in Progress project How to survive the dreaded freelance lull

DISCLAIMER

Care has been taken to check that the information is correct. Please do your own research and see what approach is right to your specific situation and to consider seeking appropriate financial or legal advice.