What is a freelancer?
A freelancer works for themselves, finding their own contracts on a regular basis.
They provide services for businesses but are not considered an employee of the company they’re hired by, which means that all tax obligations are the responsibility of the freelancer and not the business.
There are a few different types of freelancing:
Limited company – this is where a freelancer runs their own business. It is the most tax-efficient form of self-employment but also comes with the most responsibility.
Sole trader – this type of freelancer runs their own business, but as an individual without hiring staff. Unlike a limited company where the freelancer is seen as a completely separate entity, a sole trader is personally responsible for any losses.
Umbrella company – this type of freelancer is an employee of an umbrella company.
The umbrella employs a temporary worker on behalf of an employment agency and the agency will then provide the services of the worker to their clients.
This setup means that they’re entitled to certain benefits that other self-employed workers are not able to take advantage of, such as holiday and sick pay, plus the umbrella takes care of the admin side of things.
Benefits of freelancers for businesses
As a business, you can really benefit from outsourcing talent. Here’s an idea of what you can gain from hiring freelancers.
- It’s cost-effective – unlike with an employee, you won’t need to worry about things like holiday and sick pay or training costs. You can also hire a freelancer as and when you need them, meaning you’ll have access to specialist skills and knowledge without having to commit to paying the person a full-time salary.
- You can take advantage of their specialised expertise and knowledge – often it’s worth getting a fresh perspective on a project and by hiring a freelancer you can take advantage of new ideas and approaches without having to hire a full-time member of staff.
- They can help to free up other employees – should you find yourself with an increased workload that’s too much for your current staff, freelancers are really useful for helping to fill staffing gaps or take on day-to-day jobs that will then leave your current employees free to focus on their more pressing tasks.
- They’re flexible – if you find a freelancer you’re really happy with you might want them to carry out work for you on a regular basis, or you might only need them for one-off projects. They provide the flexibility needed for a growing business.
How to make the most of hiring a freelancer
When you’ve hired a freelancer, your top priority should be making the most of them and their skills, as well as ensuring it’s as smooth a process as possible.
Communication is key; detailing exactly what you want from your freelancer with a helpful brief allows for any questions they may have, meaning it’s more likely you’ll get what you want from them the first time round. Plus, it will also help the freelancer to produce their best work.
Knowing what you need from the freelancer and the amount of time you want them for is a good place to start so that you are both on the same level from the beginning when it comes to expectations.
Look for relevant experience and read reviews if possible to get an idea of the person. Hiring websites can be really handy for this.
Another factor to consider is the freelancer’s rates of pay. It’s always best to set a budget from the start so that both parties know the score – you might have a price in mind, and they’ll probably have their own rates, so if these two figures don’t match then you may need to consider negotiating.
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