Empowering the Freelance Economy

How UK freelancers can spend their tax windfall

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On average the national insurance cuts coming in April will bring an extra £350 into the pockets of UK freelancers. Instead of letting this money get absorbed or spent with little thought, we share some ways freelancers can earmark their tax windfall to invest in themselves and their businesses

When you set aside money for your personal and business development it sends a signal to yourself and others that you are dedicated to your craft and your clients’ success.

For freelancers, income can be a rollercoaster. Feast or famine cycles make long-term planning tricky, but one investment is crucial: a dedicated fund for personal and business development. Here’s why:

When you sharpen your skills you stay ahead of the competition. New tools, trends, and skills emerge constantly. Setting aside some earnings ensures you can upgrade your knowledge, take relevant courses, or attend workshops to stay competitive and relevant.

When you set aside money for your personal and business development it sends a signal to yourself and others that you are dedicated to your craft and your clients’ success. Self-investment builds expertise and by default confidence. Ways you could invest include mentorships, coaching, or even conferences to network with industry leaders. These experiences could help you tackle bigger projects and command higher rates.

When you learn new skills or niches you can also diversify your revenue streams. This is especially useful if your main source of income is seasonal or you get a dry spell of work. This helps future-proof your freelance career.

Launch a targeted marketing campaign to reach new clients, invest in social media advertising, or revamp your website to attract more business.

While investing in self-development to strengthen your freelance business is advisable, so too is prioritising your health and mental well-being. You probably have to make a call on whether what you need right now is more dedication to your health or business. They are more interlinked than we take credit for. When one is out of sync, it impacts the other.

Consider development not as an expense, but rather an investment in your future. Aim so that every pound you put in can reap rewards tenfold, securing your freelance success and personal well-being in the long run. When you receive that tax windfall, start your development fund.

  • Upgrade your skills with online courses, attend workshops or conferences, or hire a mentor to take your career to the next level. Now relaunch your professional profile and portfolio
  • Invest in tools that will make your work more efficient and effective, whether it’s a new computer, camera, design software, or project management tools
  • Invest in your health with a gym membership, yoga classes, or therapy sessions
  • Marketing and promotion: Launch a targeted marketing campaign to reach new clients, invest in social media advertising, or revamp your website to attract more business.
  • Save for retirement: If you’re not already saving for retirement, your windfall is a great opportunity to get started with a private pension like a SIPP. There are a variety of retirement savings options available in the UK. One way to invest in a SIPP is through a SIPP provider that offers index funds Read about index funds here.
  • Networking and collaboration: Attend industry events, join co-working spaces, or build partnerships with other freelancers to expand your network and potential opportunities.
  • Building a buffer: Save the extra money to create a financial cushion for unexpected expenses or invest in future projects.

Making life easier:

  • Paying off debt: Use the extra income to chip away at outstanding debts, reducing your financial stress and freeing up cash flow for other priorities.
  • Taking a well-deserved break: Treat yourself to a working holiday as a digital nomad, even if it is just a weekend getaway. A change of scenery can help you recharge, get perspective and come back to your old stomping ground feeling refreshed and motivated.

These are just a few ideas to get you started. Ultimately, the best way to use your National Insurance savings depends on your individual goals and priorities. The goal is to make you and your freelance business stronger, wiser, prepared and more resilient no matter what 2024 brings.

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