Half of the world is not a freelancer.

When you see posts which say “almost 50% of the world is freelancing” - take it with a pinch of salt.

1/ It likely refers to World Bank data, which shows that 48% of the world’s working population is self-employed.

2/ Not everyone in self-employment is a freelancer - self-employment includes precarious employment, gig work, informal work, and in many markets includes roles in categories such as agriculture. The guy who runs your corner shop is self-employed, that’s not freelancing.

3/ Global self-employment population has actually declined since 1990

Solo-self-employment in the UK is around 4.2m, of the 33m people in our country’s total work force. That’s around 12%. Of that, roughly 50% of those are seen as “freelancers” (which is a poorly and loosely defined term at best).

So, that’s closer to 6% of the UK workforce are freelancing.

Always dig into large bold claims, especially if they’re at the start of a post trying to sell you something.

Freelancing is a fantastic way of working for many people, but it’s not the only option, it’s not the right option for everyone, and it’s not the right option for every job.

Not everyone in the future will be freelancing, nor is it suitable for everyone.

And you shouldn’t feel pressured into freelancing because of bold claims stating it’s the future of work, or that half of the world is doing it - when that’s simply not true.

Understand your own needs, options and goals - and make your decisions based upon that - rather than an idea someone online is trying to sell you (because it’s in their interest to do so).

Calling all new freelancers

If you’re new to freelancing - this might be for you.

We’re looking for a group of folk who are new to freelancing, to invite you to join our beta programme for Flightplan - your co-pilot for the first years of freelancing.

You’ll be given early access to the full Flightplan programme, the checklist (a step by step guide to getting started in freelancing), the Action Plan (a personalised plan to help you make progress), and Fellows (a community of freelancers who support each other, at a similar stage in their journey).

In return, you’ll give us feedback on our work, and help us make this the most valuable resource for freelancers.

If you’re interested, please hit Join in the navigation above, and leave your details. We’ll get in touch with any eligible members.

We’ll be sharing more about Flightplan and the broader work we’re doing over the coming weeks. Stay tuned!

The Bank of England have cut interest rates from 5% to 4.75%.

What does this mean for you as a freelancer?

It may affect a few things.

SAVINGS/EMERGENCY FUNDS

If you have any money in a business savings account, or you are running an emergency fund - you may make less interest on that now, as most accounts are tied to the BoE base rate. It might be worth shopping around business savings accounts to check you’re getting a good rate.

LATE PAYMENT INTEREST

If you’ve got terms which define your late payment rates as a specific figure, rather than based upon the BoE rate, you might want to update them to reflect the new statutory rates.

Late payment interest is 8% plus the Bank of England base rate (so that’s come down to 12.75%).

I find it’s simplest to just define it as “8% plus Bank of England base rate” in contracts, so you don’t need to change this every time. If you have an outstanding invoice, don’t worry about changing the rate - it’s based upon when you amount became overdue.

It’ll also reduce the amount of interest you’ll be charged on any late payments you make to HMRC.

Missing your tax payments is going to get more expensive

From 6 April 2025, interest on late or unpaid taxes increase by 1.5%. The new rate will be the Bank of England base rate plus 4%.

The current BoE base rate, for example is 5% which means late payment interest will be at 9%. The current rate is BoE Base Rate + 2.5%, or 7.5% during November 2024.

Freelancers often face variable income and cash flow, so it’s important to be aware of changes, as well as keeping on top of your tax liabilities. Putting aside the correct amount after each invoice, as well as completing your tax return early, and paying your taxes ahead of the deadline, are all essential ways to avoid any fines.

Whilst you should always be able to afford your tax (as it’s a percentage of your income), in your first year of freelancing, you may not have budgeted for additional payments like payment-on-account, so you could find yourself with a shortfall.

Make sure you’re clear on your tax obligations, and if you’re unsure, speak to an accountant.

There’s more details on Freelance Informer and Ifamagazine

Not much change for sole-traders, increased NI for limited company freelancers

The new Labour government has announced its first budget - here is our round up of what it means for freelancers.

Income Tax - No change.

No changes to Income Tax.

VAT - No change.

No changes to VAT.

Corporation Tax - No change.

No changes to Corporation Tax.

National Insurance - increased for limited company freelancers

• Employers’ National Insurance contributions will increase from 13.8% to 15% from April 2025 - this will affect limited company owners (as you pay yourself as an employee as your own employer). If you’re a single-person limited company, paying yourself a basic salary of £12,570, you’ll pay ~£1,508.40 in employers’ NICs - which is roughly £650 more than previous years.

• There’s a decrease in the threshold at which employers’ contributions are due - from £9,100 to £5,000, which means sole directors will start paying employers’ NICs on their salary from £5000.

• For sole-traders, there’s no direct effect on you, but it may lead to your clients being less keen to pay you via Umbrella or PAYE, as there’s a 1.2% increase in the employer’s contribution, or could lead to a slight decrease in day rates, if they have to factor in that cost to the overall budget.

• The Employment Allowance will increase to £10,500, which means small businesses with more than one employee (i.e. not most freelancers) are unlikely to be affected.

Capital Gains Tax - increased

Rates will increase to 18% (for the lower rate) and 24% (for the higher rate).

Business asset disposal relief - increased

Previously known as entrepreneurs’ relief - this tax will increase to 14% from 2025/26, and 18% from 2026/2027 - effectively in line with CGT. This is applicable to both sole traders and limited company freelancers if you’re looking to wrap up or sell your business.

What does this mean for freelancers?

Some small comfort for sole-traders who aren’t seeing any direct impact on upon their incomes, although no tax breaks or reductions for those who are not protected in any way.

For limited company directors, it’s a bit of a kick in the pants - as directors already pay NIC twice, and are losing most of the benefits of the business asset disposal relief, which had traditionally been a tax break rewarding value they’d created in their businesses.

As always, we recommend speaking to an accountant to understand what this means for you and your business - and if there are any changes you need to make to your business to ensure you’re compliant.

Thanks:

Huge thanks to Gopy at AR Tax Accountants for their insights on the topic.

“But you chose this way of working …”

It’s a common challenge to freelancers who are highlighting the challenges of self-employment.

But not everyone chose to be self-employed.

Not everyone made the choice to go freelance.

A non-insignificant percentage of people (upwards of 15% last time I did the research, but I’m assuming higher now), were forced into self-employment.

Countless folk I’ve spoken to over the past three years had roles made redundant, and were unable to find employment in the harsh market as it stands today.

Many folk find themselves with self-employment as their only option to work around other responsibilities, such as caring or parenting. Many can’t find employment due to challenges such as disability, illness or living with chronic conditions.

Plenty of folk don’t feel that employment or traditional working models work for them - for example, only 30% of those with autism are in employment - and there are indicators that the self-employed index higher on neurodivergence.

There are so many individuals who are either structurally excluded from employment, and self-employment is one of the only options available.

Not every freelancer is an entrepreneur, or a hustler, or building a lifestyle business. Many of us simply need to find a way to work that works for us.

I was quoted in the Express today, talking about this very subject - after ONS data showed that there’s almost a 30% pay gap for disabled employees. However, the scale of the problem is larger than we can see, as this data only looks at employees, and businesses are not required to report on what they’re paying freelancers.

This leads to unreported gaps across many factors, such as gender and ethnicity, as well as neurodiversity and disability.

This is why salary and day-rate transparency is so important, and why we ask all hirers to share the salary information on job postings.

Women, people of colour and those with disabilities are more likely to take on lower paid work, if they’re not aware of the market rate. Pay transparency helps everyone access work in a fairer way.

Disabled workers bombshell shows how much less they are paid than other colleagues - Express

Positive news from the UK Government overnight on tackling late payments.

The government has unveiled new measures to support small businesses and the self-employed by tackling the scourge of late payments, which is costing small businesses £22,000 a year on average and leads to 50,000 business closures a year.

I’ll be going through exactly what has been announced, and updating our guides to late payment to reflect any new changes, but here are some of the key points:

• Large businesses will need to include reporting in their annual reports on how they pay and treat small businesses
• Large companies to report their payment performance twice yearly on GOV.UK
• Introduction of a new “Fair Payment Code” later this year, which will include a set of fair payment principles that companies are required to sign up to, and that will reward businesses who pay promptly.
• Consultations around further policy measures to support small businesses on late payments

There’s more to come, and more details will be released later this year, but I’m glad to see the Labour government, the Department for Business and Trade, Gareth Thomas MP along with the support of Liz Barclay at the Office of the Small Business Commissioner, and organisations like Federation of Small Businesses (FSB) spearheading this change.

Stopping freelancing and returning to employment isn’t a failure.

There’s been a lot of posts recently I’ve seen about freelancers returning to employment, and the tone is one of “I’ve not been successful as a freelancer”.

This couldn’t be further from the truth.

We need and crave different things at different times. Sometimes we need a feeling of stability, sometimes we want to focus on the work over finding the work. Sometimes we need the flexibility that some employers don’t offer. Sometimes we need a team around us.

The future of work is fluid. Longer contracts, shorter employment, a couple days here, several years there.

Design and find the models of work which work for what you need right now, and don’t see it as a failure when those needs change.

Failure would be ignoring that things change.

Even before the outbreak of racist action on the streets of the UK in recent days, the topic of racism and exclusionary practises within freelancing has been a topic of interest for me.

Last week, I posted a poll on LinkedIn to ask where people found their work as a freelancer - with the top answer by a country mile, being “via existing networks”.

Where recruitment processes in employment need to nagivate any potentially discriminatory practises, hiring freelancers is often still very much a game of “who you know”, with personal connections often being the route to finding work above all else.

Yet, even on platforms like Fiverr and Upwork, where networks should matter less, there seem to be bias too, as demonstrated in this paper from Northeastern University.

Diversity and inclusion has been a hot-topic in employment circles for a number of years - and despite many initiatives not lasting very long, and budget cutbacks seeming to affect any DEI projects and roles first, there are some checks and balances in place - such as reporting.

Firms which are listed on the London Stock Exchange are expected to disclose information on their diversity policies, public bodies are required to publish information on their compliance with the Equality Act, there’s gender pay gap reporting for organisations over 250 people. It’s not enough, but many companies also voluntarily report on their board and employee diversity figures.

Diversity isn’t really the goal here, but rather inclusive culture - an integrated diverse workforce which feels welcomed and well-supported, not just performative actions to make a board “look” different.

Yet - freelancing is rarely subject to any of this reporting or hiring process. There are no checks and balances, and hiring (or choosing not to hire) individuals is more often than not, entirely subjective, and subject to the conscious and unconscious biases of those making the decisions.

Do platforms like YunoJuno, Upwork and Fiverr need to do more to address the issue? Does there need to be reporting on supply-chain diversity? What can be done to reduce the power of the “personal network”, and highlight talent who don’t have access?

I don’t have the answers - and no single individual will be able to solve the challenges, but anti-racism demands that we take an active approach to tackling the issue, of which I’ll ensure we’re designing into this platform.

“Move fast and break things.” “When we give ourselves permission to fail, we, at the same time, give ourselves permission to excel.”

There’s always been lots of talk about how it’s okay to fail, in pursuit of success - but when you’re self-employed, the idea of embracing failure is a little harder to swallow, than when you’re an employee with a company that’s got your back.

Whilst learning from failures is invaluable, actively leaning in to risky experiments can feel much harder when your personal livelihood is on the line.

So, a useful framework from my innovation days is the “70:20:10” rule.

70% of your time spent on business as usual, 20% of your time pushing into new spaces, and 10% of your time can go on more risky outlandish bets.

When freelancing - perhaps this means building a portfolio of offerings, some which are core to what you already do, and some are stepping into new areas. Perhaps it means spreading your approach to new business. Perhaps it means trying new things when it comes to engaging with clients.

But the central idea of a proportion of your time being spent on trying new things is crucial. What works today might not work tomorrow, and continually learning and growing helps you develop as a freelancer.

Do you have an ‘innovation mindset’ for your approach to freelancing?

https://www.itonics-innovation.com/blog/702010-rule-of-innovation

Do we need to rebrand freelancing?

Self-employment as a term is misused. Sole-trader means something legally but is used freely to mean people working on their own. There are so many interchangable and poorly defined terms that are all often used badly. I keep reading about the difference between freelancing and running a business – which is just plain wrong.

And there are so many connotations around freelancing, positive and negative, which are so often misleading.

Is it time to reposition and rebrand? Which agency would do a good job? Or should we use freelancers? ;)

Is this the future of tackling latepayments?

WeTransfer have just launched functionality to support “pay before you download” using their platform. Rather than hitting that link to grab the zip file of assets, and then chasing an invoice - the payment happens before your client gets the work.

Such a small but powerful shift in the workflow of many freelancers.

“I’ll share my work with you on screen, you tell me you’re happy with it, but you’re not getting any of it until I’ve been paid”.

Too many freelancers have their work taken, and then run the gauntlet of chasing down invoices or in many cases, not receiving payment at all.

This doesn’t work for all freelancers - many of us aren’t providing assets and outputs that can be behind a paywall like this, but there are probably similar shifts in how we share work and deliver work which can also be put in place.

For instance, those of us in strategy will almost always present our work on screen or face to face, and then provide a longer form write-up which can be shared and built upon across teams internally.

Personally, I’ve built a tool which prevents proposal ghosting, that forces the client to respond or reject a proposal, saving me time and effort in chasing and wondering what’s next.

There are going to be lots of subtle but smart redesigns of how freelancers work with clients that we’ll see in the coming years, which rebalance the power dynamic and I’m all for it.

See more

• WeTransfer’s Sell Files Get Paid
• Alexandar Vassilev on why this matters

In 2017, NYC enacted new laws to protect freelancers, namely the right to a clear contract in writing; the right to be paid on or before the invoice due date; and rights to sue their client in the case of non-compliance.

It echoes some of our laws in the UK around commercial debts (the Late Payment of Commercial Debts (Interest) Act 1998 is what we have to protect us against late payments, and allows us to surcharge and apply interest fees).

Some year on, a review went to show it had improved payment practices, and the stronger legal protections were welcomed - although enforcing the act, and awareness of the act by both freelancers and clients remains low, along with some retailation to freelancers acting upon their rights.

I’m interested in what learnings came from the NYC act, and what improvements we’d like to see in the UK to further support freelancers to acting upon late payments.

I see similar issues here around a low awareness of freelancers rights in terms of dealing with late payments, plus the emotional posture of many freelancers being almost apologetic in asking for the money which is owed of them.

Labour’s manifesto and new Business and Trade secretary Jonathan Reynolds have spoken to improving legislation around late payments, but despite legislation already in place, we still see around half of SME invoices being paid late.

The NYC act allows them to sue for twice the amount owed - do we need to look at more significant penalties in the UK? Do we need to have a channel to chase payments which are arbitrated away from the freelancer, so the non-paying business faces the wrath of an independent party, rather than an individual freelancer?

And what can we do to improve the visibility and understanding of the current laws, and support organisations like the Office of the Small Business Comissioner and the work which Liz Barclay and team are doing?

https://www.nyc.gov/assets/dca/downloads/pdf/workers/DCWP-Freelance-Isnt-Free-Act-Five-YearReport-2023.pdf

When businesses are struggling to retain their best people and 25% of people in the UK have a side hustle - do businesses need to embrace their people having more than one job and one focus?

Rather than just working with freelancers as external resources to augment our internal teams - should we also be looking at how we support our internal teams to build their own businesses too?

Imagine …. if every microbusiness had the support of a parent business for access to resources, financing, tools, collaborators - would we see more success? And the benefit to the parent business - an equity share in a hundred small businesses, which could go on to be the next Apple, Amazon or Google.

This white paper from Henley Business School is fascinating, and prompts some interesting questions on what modern work needs to look like.

https://assets.henley.ac.uk/defaultUploads/PDFs/news/Journalists-Regatta-Henley_Business_School_whitepaper_DIGITAL.pdf

Does #SethGodin’s advice for freelancers to charge 2.5x what they’d expect to make in full-time employment still make for good maths?

It’s ten years old as a blogpost, but I still see references to it.

I’m interested in what people think, does the algorithm still work for 2024?

https://seths.blog/2015/03/double-and-half-freelancer-math/

I missed this when it was first published - LSE’s report into the pressures of the self-employed market post-covid, lower incomes and a feeling of being “trapped” within self-employment, authored by Maria Ventura et al.

Makes for a harrowing read, but also clearly a number of core themes which a) the support ecosystem could work together to tackle b) a number of areas for the new incoming The Labour Party government, Jonathan Reynolds and team, to think about how and where the self-employed can be better supported and c) for freelancers to be aware of the risks before taking the leap.

As this data shows, even before the election, ,there was a shift from the Tories being the party of small business, to Labour (36% say they would vote Labour in a general election), and of the 5.5M SME in the UK, that’s a sizeable portion of people the new government need to engage and support.

https://cep.lse.ac.uk/pubs/download/cepcovid-19-030.pdf