Freelance Jobs and Freelance Sites: How to Make Money Online

Freelance jobs and freelance sites are abundant, and the answer to many people's questions on how to make money online. From freelance writing to being a freelance designer, your skills can allow you to work from home. 

February's blog was filled with ways on how to make money online. Work from home jobs were discussed in the following blogs:

Another fantastic way to make money on the side is through finding freelance jobs. I mentioned this way to make money online briefly in my post My Top 3 Ways to Make Money on the Side.

Freelance jobs allow you to make money from home, or make money only. Some of the top freelance sites, include:

People per hour is a fantastic freelance site that allows freelancers to connect to jobs. 

Some other brilliant freelance sites include Fiverr; this really super easy to get started on. Sign up here to register an account (they also have awesome bad ass adverts which I love, and really epitomises this website). Fiver contains a lot of short term freelance jobs.

I love Toptal; if you are looking for very high end freelance jobs, Toptal are the company for you. Clients that you can work for include Airbnb, JP Morgan etc. If you are looking for longer term roles, this company provides fantastic, bespoke and high end work. You can sign up here 

99designs.com: are you a freelance designer? This is another great website for you. 

The following are some other freelance sites, that you might not typically think of as freelance, but are all very good ways to make more money.

eBay: selling on eBay is a great way to make more money. You may be selling old furniture, sports equipment, clothes; these can all be sold quickly and easily through eBay. Another way to earn money online through eBay, is through buying goods on eBay, adding a premium and selling them on. Specialist clothing (cycling, snowboarding, running etc) where individuals are willing to pay a premium can be a great way to earn money from home. Buying this gear in sales or on discount stores, and selling them for a profit can provide a good form of income. Sign up to sell through eBay, here

Teachable: are you able to create online courses such as learning a foreign language, photography, baking, cake designing, marketing, financial modelling? Create an online course for people on this subject matter. If you are skilled at something, and think you can help others, get on Teachable here, and build a profile and courses to sell for free. This is a brilliant freelance job; you can build a name for yourself as an expert through these courses and create an online business through consultancies. 

T-shirts making (and selling): you can have the worst design skills in the world, and the best design thoughts, or it can be the other way round but making and selling t-shirts has never been easier. I love Teesprings; they offer a brilliant platform to build your t-shirt company, and have made several millionaires out of it. Also, check out the video at the bottom of the homepage; it's magic. Again, this is a fantastic way to make money online. 

 

What to Consider When you Make Money Online

Remember, when you make money online, you need to pay tax on it. Freelance jobs are great, but you have to make sure, you either file a personal tax return, and pay your tax due, or you incorporate a company, and pay tax from that company. 

One of the questions I get asked repeatedly on freelancing is whether to you should establish yourself as a company or a sole trader.

For freelance jobs, here are my thoughts on whether to establish as a sole trader or as a company. There are three big considerations I believe to be important on which route to consider:

  • Who are you working for;
  • The tax;
  • What type of work are you providing; and
  • The paperwork

Who Are You Going to Be Working For?

If the work you are performing is for a larger organisation (Plc etc) then the Plc will probably stipulate that you should have a registered company. The reason for registering a company is invariably threefold:

  • firstly, the plc is protected for risk (I'll come onto this below); 
  • secondly, you "seem" more professional by having a company; and
  • thirdly, as a company, you'll be deemed to have some longevity in the market, and an element of permanence.

If you are providing work to small companies, or other individuals, you probably will not be stipulated to incorporate a company. 

Tax

As a sole trader (with no other form of employment), you are taxed on the income you generate from working. HMRC's calculation is here (page 12); it's very easy so do not fear it.  

If you incorporate a company, you need to consider two things:

  1. the tax your company has to pay, and
  2. the tax you pay, as a director, if you take dividends or a salary out of the company 

The tax you pay is dependent on how much you take out, and whether you have a job elsewhere. 

Company tax: as a general rule of thumb, company tax is 19% on your profit (unless you make a loss).

Personal tax: (I am not providing financial advice as each situation is different) the dividend threshold for being tax free is £5k (although this will fall to £2k come 6th April 2018). People performing a freelance job normally take a mixture of dividends and then salary; individuals can take a salary up to the national insurance threshold of £8,164 to prevent paying national insurance in their company. £8,164 also falls under the personal allowance threshold of £11k for personal tax. 

If you have another job you need to consider the route you go down. 

What Type of Work Are you Providing?

Limited Liability Company (i.e setting up a company): in the U.K if you set up a company, you are providing services and products from that company. If you mess up providing those services, the company / individual that was your customer can sue your COMPANY, but not you. 

This is compared to being a:

Sole Trader: under this method, you as an individual are providing services to a person or company. If you mess up, YOU, as an individual can be sued. This involves your customer claiming money; if you don't have that money in your account, and you don't have adequate insurance, the customer can come after your house, car, bank account etc.

If you are providing any kind of professional services advice (i.e legal advice, accounting, financial advise), I would err on the side of starting the limited company. 

The Paperwork

A final consideration that you may wish to think about is the paperwork. As a sole trader, you register with HMRC, and you're off. You need to file your tax return once a year but the onus is minimal outside of that. 

For companies it's still relatively simple. In the UK, the government restructured the Companies Act 2006 incorporation regulations making it much easier to start up your own limited company. Register your company here at Companies House. Just follow the steps, and you're off as well. 

There are other filing considerations associated with being a limited company. These include:

  • Annual Return;
  • Corporation Tax Return; and 
  • Annual Accounts.

Insurance is not legally required unless you incorporate a company and you have more than one employee (i.e, not just you); here you need to get Employers Insurance. This all said, I strongly recommend professional indemnity insurance; it protects you, providing the services and it's not expensive. I used Arthur J Gallagher who are an insurance broker to find an insurer. My insurance cost me £450 a year so not hugely expensive. 

Summary

Finding freelance jobs is easy with the high number of freelance sites; you can easily make money online, or make money from home. You do need to consider whether you register a company or remain as a sole trader, and the above considerations should form some of your basis for decision.  

Photos provided by Unsplash.com

This site uses affiliate marketing links.