As with every life choice, working as a freelance has its benefits. But there are also the downsides to consider. If you are looking for the protection that employee status brings, the precarious existence of the freelancer may not be for you. It is a case of weighing up the pros and cons and deciding which most suits your skills, your circumstances and your character. This article highlights some of the issues you may want to consider.
Steady salary v. Uncertain Earnings
If you prefer to know that there’s a fixed amount paid into the bank at the end of the month, then freelancing may not be for you. As long as their employer remains solvent, employees can get on with their work and know that come the end of the month funds will be paid into their account. As a freelancer you don’t have that safety blanket; you live by your wits and have to sell yourself again and again. But that is part of the appeal. You’re only as good as your last job. If you’re good, and are selling a service your clients want, the rewards can outweigh the attraction of a fixed monthly pay-cheque. There is nothing quite as satisfying as sealing the deal, delivering the goods and getting fair recompense for it.
Tax paid v. Paying Tax
Again, if you’re in regular employment, you don’t generally have to spend much time squaring things up with the taxman; it’s all done for you. If you’re a freelancer, you need to do it yourself. And that involves paperwork. You need to register with HMRC as self-employed, complete a self-assessment tax return every year, keep receipts in order and report income and outgoings accurately. However, the UK is pretty bureaucracy-light compared with some other European economies. You can submit your tax forms online and there’s plenty of advice at the press of a button about how to do it.
Guaranteed benefits v. No Guarantees
This may be the clincher for some would-be freelancers. It’s all well and good thinking you’ll live forever and never get ill, but for the freelancer, unexpected events can mean the difference between a meal on the table and an empty cupboard. These days clocking on as an employee in the UK generally means paid national insurance contributions, health cover and in-service death benefits for the family. It may not make much difference to the monthly pay packet, but when things go wrong – or you reach the end of your working life – you’ve got the back-up you need to see things through. As a freelancer, you’re on your own and you need to factor insurance contributions into any calculations. £100 received for a day’s writing or copy-editing is not yours to rush out and spend on the latest gizmo for the PC; a good part of it should be put aside for a rainy day in the form of insurance contributions. Where you’ve got a small advantage over your employed friends is in choosing your own type of cover; you’re not bound by company schemes or loyalties.
Working to the rules v. Making your own rules
If the security-side of things weighs in favour of employment, the freedom you enjoy as a freelancer tips the scales in the other direction. You determine your own working hours and your own working practices, depending on what suits you best. Of course, a certain amount of self-discipline is needed; the clearing of the breakfast table doesn’t mean the start of a day’s TV viewing. But having the freedom to develop your own style of working, without company manuals or managerial edicts to restrict you, is one of the joys of freelance status.
The Routine v. Living on the Edge
This goes to the heart of the debate. For all its advantages, being an employee is signing up to a regular life, a daily routine of logging on, working through the pile and accounting for your time. As a freelancer you ride on the open road with the roof down and the wind in your hair. It’s not always a straight run and there are bumps along the way, but if you get it right it’s a great adventure.