Hello Christine,
All good advice given here.
My thoughts – (I’ve been freelancing for nearly 40 years) -
There are several options, and what you choose will depend on what kind of work you do, what kind of tax/legal situation you have (and want), and how much you are willing to deal with on the biz side of things.
Of course this could all be a bit off because – being a Yank – I know nothing of UK law.
So for what it’s worth – and assuming comparable options are available in the UK:
By far the simplest is ‘sole proprietor’. All you need to do is register a DBA (doing business as). Costs almost nothing – taxes are very simple – you can deduct all expenses.
Limited Liability Corporations (LLC) and Limited Liability Partnerships (LLP) in the offer some tax advantages – how much of an advantage, if any, depends on many factors. Perhaps more importantly, they offer liability protection. For example, if your LLC is successfully sued, or your business gets into financial difficulty/bankruptcy, your personal assets are fully protected.
LLC ’s require more paperwork, fees, and filings. They make your taxes more complicated.
Health Insurance is a big factor in the US – thankfully, I assume a non-issue for you.
On a personal note, I could not imagine having lived my professional life any other way. The constant variety, challenges, learning and discovery that have flowed from that choice have been very fulfilling. It has meant dealing with very lean times and enjoying very ‘fat’ times.
If you are highly adverse to risk, and uncertainty causes undo stress, freelancing is a questionable choice. If droll, mundane, repetitive work darkens your spirit, then freelancing will likely fit well.
I shouldn’t overgeneralize – my personal freelance trek has been wildly diverse and chaotic – by design I suppose. My more organized and methodical friends and colleagues have demonstrated that freelancing can be considerably saner.
In any case, good luck and
Best Wishes,
DA
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