If you’re new to freelancing – or you’re thinking about taking the plunge – it can be a surprise JUST how much admin you need to sort out when you start up. Here’s a checklist so you can hit the ground running when you do embark on a freelance career.
- Business insurance - I added a home office and business travel insurance to my household contents policy as it was a less expensive route. However a specific business policy should also cover you for things such as loss of earnings if there is a flood/fire etc.
- Professional indemnity insurance - whether you need this will depend on your line of business but some public sector organisations in the UK require it.
- Personal pension – you no longer have the benefit of a corporate pension scheme, so you’ll need to start your own personal one.
- Bank account – for some time I paid my freelance earnings into my existing current account but my accountant advised to keep things separate as it makes things easier when you have a VAT inspection. So I now have a separate account.
- Tax and national insurance – in the UK, you need to register as self employed within three months with the HMRC.
- VAT - again this applies in the UK, you probably won’t reach the VAT threshold in your first year but, if you have large items of expenditure, or if you buy in third party services which charge VAT, you should register in order to reclaim the VAT on these items.
- Business cards – I got a friend to design my business cards and he also designed a stationery template, so I can print out letterheads and invoices as and when I need them.
- Keeping accounts – you’ll need to set up a system that logs all your invoices sent out as well as bills received. There are obviously software programs for this but I tend to record this information on a spreadsheet.
I think that pretty much covers it for admin stuff. I’ll cover kitting out a home office in a future post.
How much of a headache was sorting out the admin when you started as a freelancer?