December 31, 2020

A freelancer’s guide to starting the new year right

Written by Martin Baxter

Happy new year, freelancers! The fresh start that we all needed is finally upon us, and we’re feeling mixed emotions here at Dinghy: relieved to see the back of 2020, excited for a fresh start, but also anxious about what 2021 has to hold. There are some things – global pandemics, Brexit, mysterious monoliths – that are out of our control. But there are some other things that, thankfully, we can control. And that’s what this guide is all about: taking control so that you can get 2021 off to a fantastic start. 

Get ready for the self-assessment deadline 

It’s a date that should be ingrained in every self-employed person’s mind, but just in case you’d forgotten, your Self Assessment tax return is due back with HMRC by January 31st. Maybe you’re among the super-smug and organised among us who has already finished their return (did you know it can be completed at any point after the tax year finishes in April?). But if not, now is the time to crack on and get this sorted. We’d advise against leaving it until the last minute; you don’t want to be frantically scraping around for receipts and invoices in a panic, and if you have a query, the HMRC helplines can get extremely busy the closer it gets to the deadline. In January last year, 27% of customers waited more than 10 minutes to speak to an adviser. 

Filling in a tax return is never going to be anyone’s favourite job, but if you’ve kept good records throughout the year, it shouldn’t be too stressful. Our top tips: 

  • Set aside a good chunk of time to focus on this, and this alone. Other work will have to wait for a couple of hours. 
  • Have everything you need to hand before you start: your accounts, receipts, bank statements and your login details. 
  • Make it fun. Fortunately, this is the sort of task you can complete with a cuppa and a slice of cake for company, and your fave tunes blasting in the background. 
  • Plan something to celebrate after: treat yourself to a glass of bubbly, a leftover handful of Quality Streets or a cheeky January sales purchase. You’ve earned it! 

Look at a pension fund 

Evidence shows that freelancers are not planning for retirement. Only 31% of self-employed people are saving into a pension. With workplace pensions now compulsory for employees thanks to the automatic enrolment government scheme, this is one area where freelancers could get left further behind than their employed counterparts. Retirement might seem a long way off, but you don’t want to still be freelancing into your 80s, so now is the time to look forward and plan ahead. A decent pension pot will mean you can enjoy a comfortable retirement, and the earlier you start, the more you will save. You can start your contributions small and it means you won’t be tempted to overspend. You can even get tax relief on your contributions. There are lots of different options when it comes to pensions, so your best bet is probably to visit a financial advisor to help you plan – they’ll be able to recommend schemes that are suitable for freelancers.  

Start a savings account 

If 2020 has taught us anything, it’s that we need to expect the unexpected. An accident that leaves you off work, a childcare emergency, a client going out of business, a spouse made redundant, a global pandemic: all these things can severely impact your income as a freelancer and you have very little control over them. What you might be able to control, however, is your contingency plans. Starting a savings account, and siphoning off a portion of your income into this every month, is the best way to build up a financial buffer to get you through lean times. The best way to ensure you can save is to transfer money out into your savings account immediately after you get paid for a job. It’s tempting to leave it and think, “I’ll transfer what’s left at the end of the month”, but, let’s be honest with ourselves, if it’s there, there’s a risk it’ll get eaten up by Just Eat orders and impulse online purchases. So “save straightaway” is our motto. 

Update your website 

If you have a bit of downtime before your work starts up again for 2021, you could use it to make sure your website and social media are up-to-date. These will often be the first thing a prospective client checks before they contact you to ask about a job, so make sure they are giving off a good impression. 

Make sure your website shows: 

  • Examples of recent work. 
  • An up-to-date list of your qualifications, skills and relevant training. 
  • An accurate list of services you offer and areas of expertise. 
  • An easy-to-use contact page or clearly displayed contact details. 

Try to get into the habit of updating your website regularly; it will improve its position in search engines and show that you’re still actively working, making new clients easier to come by. A blog is a great way to create fresh content and drive traffic to your website. Our article here gives some of our top reasons we think freelancers should have a blog. 

Sort out your business insurance 

Perhaps you haven’t got round to this important job yet, or perhaps the new year means it’s nearly time for a renewal. As a freelancer, it can be tempting to wing it and go it alone without business insurance. But this is risky. Starting the new year right means starting it safely, knowing that if something goes wrong, you’re covered. After the mayhem of 2020, the last thing any freelancer needs is to be facing a legal claim alone. Dinghy insurance is tailored specifically to freelancers and includes: 

  • Professional indemnity insurance 
  • Public liability insurance 
  • Business equipment insurance 
  • Freelancer Assist 
  • Cover can be turned on and off  

Get your free quote online today – it’ll only take seconds, and you can relax knowing that we’ve got your back for the rest of whatever this brand new year has to throw at you. Cheers! 

About Martin Baxter

Read more blog posts by Martin Baxter


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