What is a freelancer?
When you’re desperately hunting for a way to fit paid work around your kids, going freelance sounds ever so appealing. But what actually is a freelancer?
What is a freelancer?
The short answer is that a freelancer is someone who works for themselves and delivers services to other businesses.
It’s not simply the ability to work for more than one organisation that distinguishes a freelancer from an employee however. The other major difference is that, as freelancer, you are essentially a mini business all of your own. On top of delivering your services, you’re also responsible for finding clients, putting forward proposals for work, agreeing budgets and making sure you get paid for your services. It’s all rather different from being an employee who simply does their job in return for a regular wage at the end of the month. Whether or not that’s a plus, depends on what you’re looking for!
As an interesting aside, the term ‘freelancer’ is believed to have originated in the late 18th century to refer to soldiers who were not tied to one individual lord but offered their skills to any nobleman who needed extra military help – hence ‘free’ (not attached) plus ‘lance’ (the weapons used). While you don’t tend to find many military freelancers today, the concept of being free to work for multiple clients still remains at the heart of freelancing.
Is a freelancer the same as a sole trader?
The term ‘sole trader’ is used by HMRC to refer to someone who runs their own business and is self-employed. In other words, it’s a specific type of business structure that has just one person in it – you.
Freelancing, on the other hand, is a more loosely defined term for individuals who work for themselves and deliver services to other companies. Most freelancers start off as sole traders (in fact, this is the default when you register with HMRC as self-employed). However, you don’t have to be a sole trader to be a freelancer. You can set up as a limited company or even form a partnership and still be a freelancer, as long as you work for yourself and you offer services to multiple clients.
In other words, if you’re a self-employed business of one, you’re a sole trader. If you work for yourself and deliver services to multiple clients, you’re a freelancer. And if you do both, you’re a sole trader who delivers freelance services. So now you know!
What’s the difference between a freelancer and a contractor?
Contractors and freelancers are both self-employed individuals who work for more than one client. The big difference between the two is that a contractor will only work for one client at a time and may well be based within the client’s workspace for the period of the contract. In contrast, freelancers tend to work for multiple companies simultaneously and will normally have their own workplace, separate from their clients, even if this is only the kitchen table!
While there’s no hard and fast rule about the types of work that each can do, you’re more likely to find contractors working in areas such as finance, IT, education or social work that require specific skills for a set period of time. Freelancers, on the other hand, tend to work across a broad spectrum of roles which could include these but also span anything from graphic design to tutoring.
What types of work do freelancers do?
While freelancers are more common in certain fields, such as journalism, editing, graphic design, marketing and administration, you can be a successful freelancer in pretty much anything from software engineering to translation.
Generally speaking, a company will use a freelancer if they have a piece of work that they can’t or don’t want to deliver in-house, either because they need specialist skills for a particular project or because it’s more cost-effective to use a freelancer than employing a member of staff to deliver the work – for example, if it’s tasks that they only need on an ad hoc or temporary basis.
Essentially, if you can offer services that a client needs, there’s an opportunity to freelance – even if the company has never used a freelancer before.
How do I become a freelancer?
To become a freelancer, you need to:
Register with HMRC to let them know you’re self-employed. This ensures you pay the right tax and NI contributions
Register for VAT if you are likely to bring in £85,000 per year or more
Find clients and start delivering freelance work.
We’ve created a free practical guide on How to Set up as a Sole Trader, to help you get started.
What else should I know about freelancers?
When you’re on your hundredth Zoom meeting of the day and still haven’t had a chance to speak, it’s easy to fantasise about going freelance. But freelancing is definitely not the easy option. If you’re a freelancer, you need to be the marketing manager, finance director, office administrator, chief tea-maker – oh yes, and deliver work to your clients. In other words, freelancers have to be organised and prepared to turn their hand to a whole range of different activities. It can be incredibly fulfilling but don’t go in expecting an easy ride.
If you’re wondering you should take the freelancing plunge, ask yourself these 10 questions to find out if freelancing is right for you.
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