On the 1st January 2017 I am going freelance 🎉. It has been about 3 years since I last freelanced.
I've decided to try and keep a diary to share my experiences, lessons and the highs and lows. This first post is focussed on getting started, what do I need? It will be localised to the UK, but it's likely your country has a similar setup.
I've also created a repo on Github with useful freelancing resources.
So after much thought, I decided to go freelance. Before that official "I'm freelance!" date arrives, there are few things I needed to take care of:
It's very possible that thing's will start slowly, especially, if like me, you are starting at the start of January.
I don't want to force myself into having to take crappy work. To give myself some freedom, I saved around £9K.
Registering a LTD Company
There are bunch of reasons to have a LTD company, rather than being a Sole Trader.
Registering one is really easy. The Gov UK website has lots of information about registering. You can also use a service like 1st Formations, that will register the company for you plus other things like VAT.
You will need to register for VAT if (dated: 29/12/2016):
- Your VAT taxable turnover is more than £83,000 (the ‘threshold’) in a 12 month period
- You receive goods in the UK from the EU worth more than £83,000
- You expect to go over the threshold in a single 30 day period
The first rule only really affects me. However "VAT taxable turnover" is quite vague. I'm currently waiting to hear from my accountant about what exactly is "VAT taxable turnover". For example, if all my work is from the US, I would presume that it wasn't "VAT taxable turnover". ¯\_(ツ)_/¯ TLDR: if any doubt ask a professional.
Business Bank Account
In the UK, there is no legal requirement to have a business bank account for a LTD company. However, I find it just cleaner to keep all business activity separate from my personal account. Plus my poor accountant will have a headache trying to work out what transactions are business and what transactions are me buying dishwasher salt.
In the past I have had my business bank account with HSBC. They were perfectly good, though one issue I had was that whenever I wanted to sync Freeagent with the account, I had to input a key code. This would mean that the account would rely on me to keep everything in sync. I've decided to go with Santander this time as a key code is not required to sync with Freeagent.
I would really recommend getting an accountant. They will save you money, time and stress. Just do it.
I really like Freeagent so my main requirement is that the accountants can use Freeagent.
Freeagent has a webpage showing some of the accountants that use it's software.
I have chosen Gorilla Accounting. They seem heavily focused on freelancers and have a reasonable flat rate of £85/month. I've only just registered with them but will update this post if I'm unhappy and choose another company.
Insurance is something you don't think you need it until you need it, then it's too late. Same as the accountant, just get it.
That's it! All pretty simple. If you're interested in going freelance or just have any questions, feel free to email me or leave a comment below!