In honor of National Freelancers Day, we here at Raindance thought we would share the best tips and tricks for starting to freelance and how to become a freelance success. You can join in on the conversation on Twitter with the hashtag #NFD2014 and by keeping up with @CelebrateNFD and @teamIPSE!
1. Nearly all film work is freelance.
Whether you are Sam Mendes making the next Bond film or a runner fetching coffee on set, you’re most likely doing so on a freelance basis. If you’re on the Raindance website, we assume you want to ultimately be a filmmaker. But freelancing can be a similarly creatively satisfying position. Just ask the massive amount of people in the industry who are building joyful and fruitful careers from this kind of work.
2. Make sure you go into freelancing with eyes wide open.
The main question to ask yourself is “Why are you freelancing?” What do you want to get out of it? Do you just want to pay the bills so you can make your big project or do you truly want this to be your main career?
3. It’s really easy to lose sight of your main goal once you’ve started.
Being a freelancer means you have significant control over how much money you make. But if you are only focused on the money, you might find yourself without a single ounce of progress when it comes to your film. Because of this, you need to create a plan. Say what you want to have completed by the end of each year, or even each month. Creating your film can be done in five years, even with your freelance gigs, so keep it in mind when you write down your goals. Make the plan flexible, but don’t lose your focus on it.
4. If you’re still a bit wary about starting as a freelancer, you should think about all of the possible benefits.
Undertaking additional jobs within the crew will not only put cash in your wallet, but it will increase your skill set and understanding of the major parts of production, give you a chance to study other directors, and cultivate your network of possible coworkers. It’s an education you get paid for and should be appreciated as such.
5. You have to make a psychological separation between you and your trade.
Once you’ve decided to start “going freelance,” you have to realize you’re creating a business. Despite the definitively personal connection, you should create a division between the two of you. This might seem odd, especially if you have ever worked for a company, but being a freelancer means that you are in charge of everything. “You’re the marketing department, the finance department, the HR department, the client service department, and the tea-making department.” Most importantly, you’re the boss.
6. You need to tell the tax people.
Don’t just ring up Her Majesty’s Revenue & Customs, and say “BTW, I’m in freelance work now.” They don’t understand that. You need to determine whether you are “employed” or “self-employed.” And how do you do that?
7. Decide whether to be a sole trader, set up a limited company, or set up a partnership with other freelancers.
These are all permissible mediums you can use to run your business. Numerous freelancers employed in the media choose the sole trader path since it’s moderately easy to set up, but the other options are definitely worth exploring. Just remember that every choice has its own tax and legal consequences.
8. A good accounting firm can be a freelancer’s best friend.
They’ll be able to help you with all of this new information. An accountant can offer tax guidance, complete the pertinent tax returns and, if you have a limited company, generate the obligatory end of year books, which contains the P&L and balance sheet. A good business accountant will typically charge between 60 and 120 pounds per month for the basics.
9. As a freelancer working in the UK, it’s really important to know the rules relating to employment status and IR35.
Here are some miscellaneous rules you might not know.
- If you do all your work for one client, or if you have very long contracts with particular clients, you could be vulnerable to being viewed by the HMRC as an employee of that client, thereby owing more than 100,000 pounds in additional taxes.
- If somebody attempts to sell you an offshore arrangement in order to have your taxes done, be very, very cautious – those almost always spell trouble.
- The types of taxes you could be liable for: National Insurance Contributions, income tax via Self Assessment, pay as you earn (PAYE), corporation tax, tax on dividends, and VAT.
- Another important rule to be aware of is that you have to keep accurate business records. That means keep all of your receipts, and keep them organized!
In general, make sure you’ve done your research and stay on top of things. Messing up with the HMRC can lead to a severe amount of pain and suffering when it comes to your finances
10. But if you work hard, stay organized, and love what you do, it is completely achievable to turn it into a lifetime career.
In the end, becoming a freelancer could be the best decision you ever made for yourself!
Be sure to connect with The Association of Independent Professionals and the Self Employed at www.ipse.co.uk.