If you’re not sure how much you’re likely to make, you can register for and pay VAT retrospectively, when you reach the threshold.
If you think your company is likely to make more than £85,000 in gross fees per year, then you will also need to become VAT registered with HM Revenue & Customs (HMRC). Your accountant can offer guidance on this.Ĭompanies House will provide you with everything you need to know about starting, running and closing a company.
Professional indemnity insurance is crucial, while Employer’s Liability and Professional Liability Insurance is optional depending on the business. It is also important to note that you will need to protect your company with professional insurance. Registering your own Limited Company is a very straightforward process, but you will also need to apply for a business bank account and take advice from an accountant – preferably one specialising in Personal Service Companies. This is because they want a ‘business to business’ relationship, rather than engaging with you directly as a self-employed worker. Many businesses and employment agencies will require you to have set up your own Limited Company – sometimes referred to as a Personal Services Company – to get paid for your work. To make things slightly easier we have outlined each option below and included some useful links to introduce you to the processes involved: When it comes to getting paid for freelance work, the three most common and practical options are: setting up your own Limited Company, signing up to an umbrella company, or simply speaking to the business or agency about PAYE, via payroll. As you get more familiar with the freelance market, you’ll get a sense for what different types of projects and roles require, and how the day rate reflects that.
It’s worth pointing out that this is just a guide and day rates can vary, depending on the organisation, the sector, the length of the contract and other factors. So, for example, if your current basic salary is £50,000, your calculation would be: