Advice needed : Registering & Freelancing whilst Jobhunting & Working

[Deviouscreations]

Firstly, I have only found this website in the past couple of days, but I have to say its been an incredibly useful resource...

I recently left my job just before Christmas of last year, and have since been actively looking for new work with similar employers whilst signing on for JSA. I've had good positive feedback from several companies, but nothing concrete as yet.

However, the opportunity has recently arisen for me to do some freelance work for a few days whilst I'm looking, which will of course help greatly. I've also recently been in talks with a few other people about freelance so there is a potential for it to kick off over the next few weeks. However, I'll need to provide a UTR, which at present I don't have.

I've been spending the last couple of days trying to research what needs to be done to set myself up officially as a freelancer, and what effect that might have.. especially as I still want to pursue another full time job. I've been to my local tax office for advise, and used the HRMC's employee status checker. (Which actually suggested the first time that I'd be employed rather than self employed for one project)... but I'm still not quite sure of the best course of action.

So.. Questions.

1. I'm sure this has been asked countless times, but can I be full time employed & self employed simultaneously? IE work for a company and freelance in my spare time?

2. What sort of freelance would be ideal? I've spoken to friends of mine who also freelance and they've recommended Sole Trader. (I'm single, no ties, rent)

3. Under Jobseekers Allowance, I can work up to 16hrs per week. However if i declare myself self employed, does this change even if i barely get 6-8 hrs a week? (the jobs offered wont last more than a few days each).

Whilst I'm looking for a full time job, I'd love to be able to take on any extra work i can, however I dont really want to have to use the status checker each time to see if im liable for tax. I'm happy to register, I just need some clarification and re-assurance as to whether its the right / correct move. I realize that a registered self employed freelancer is going to be more appealing to some people than some lad with photoshop. I'm just keen to know if there are any hurdles or pitfalls with my current situation.

Many thanks in advance.

D.

[David Colom]

Q1 : Yes - no problem with that.

Q2 : It depends on how much you are earning, who your clients are and your IR35 status

Q3: 16 hours applies whether you are self-employed or not.

[Deviouscreations]

Originally Posted by David Colom

Q1 : Yes - no problem with that.

Q2 : It depends on how much you are earning, who your clients are and your IR35 status

Q3: 16 hours applies whether you are self-employed or not.

Thanks for the response. What is IR35? Thats something I have not come across before. How would I find out the status?

[David Colom]

In a nut shell - a nasty little piece of legislation that makes you take your company income as salary rather than dividends or other form of payment.

The good news is there are ways to work around it but you need to take professional advice on your specific circumstances.

[Deviouscreations]

Originally Posted by David Colom

In a nut shell - a nasty little piece of legislation that makes you take your company income as salary rather than dividends or other form of payment.

The good news is there are ways to work around it but you need to take professional advice on your specific circumstances.

Thanks, (I also read through the IR35 "guide" in the legal forum).

I don't expect or plan to make large sums of money from freelancing, and I'll just be taking on projects when i can, but I want to do it all above-board so to speak.

Apart from Sole Trader, what would be the other options?

[David Colom]

An umbrella company or set up a one man ltd company if you will earn over £20k pa

[Deviouscreations]

Originally Posted by David Colom

An umbrella company or set up a one man ltd company if you will earn over £20k pa

I wont be earning anything near £20K a year, so for now I think a LTD is a bit much. I've been researching Umbrella companies, (and reading up on "Parasol"), and it all seems good, but what happens if you only expect to get the occasional work? if you dont get any work for a month, do you still get taxed or charged? As its on a PAYE basis, how does this work alongside having a full time job on PAYE?

[David Colom]

Make sure you chose an umbrella that does not charge you if you are not working. If you have a full time job on PAYE then the umbrella work will be taxed at basic rate tax.

[ilyassacha]

Hi all, I graduated in interior design in 08, and dont have much experience, but i think im good at what I do, do you guys think it'd be worth it to set up as a freelancer?

[David Colom]

Maybe but you first need to find a contract for at least £150 a day before you form a limited company.
It might be best to get some work experience as an employee first before you go it alone.