Freelance
Council Tax
Working as a freelancer is just as hard as work as an employee. The tax has a weird role for freelancers too. £11,850 of money income is totally tax-free; past that you pay 20% up to the first bracket of income of the total of £46,350. You must manage every purchase as proof of your expenses and everything you gain all in for tax. To avoid paying a lot of tax at the end of the year most freelancers have a sperate account that has 20%-40% (depending on how much you gain) of their income in there already to pay tax at the end. It may seem simple at first, but it does take a toll on you as you must keep everything on check for a whole year. Money spent on business doesn’t get taxed when submitting your tax return. This can change though so it’s always good to try and claim the taxes back of each year. Freelancers can also hire financial advisers to help with all this, but its best know this first before gaining any additional help.
Pension
As for pensions in freelance; there is none. As for most companies, they will offer to cut some of your (as an employee) pay to their storage as an investment fund that you can later access when you’re in retirement. There's another way to receive a pension as a freelancer and that method is called Self-Invested Personal Pension (SIPP). This is to allow you to choose and sort any amount of your expenses in a pension plan for your own pension. This also benefits National Insurance to the NHS and state pension for you later.
Expences
Here is a brief spreadsheet of my monthly to yearly expenses. Using this is also helpful in budgeting in avoiding overspending.
Using this calculator called ‘Self-employed ready reckoner for UK taxpayers’ I put my brief sum of how much I spend per month and see how much tax is taken from me monthly and yearly. And in total, I Have to pay £3,358.40 in tax per year shown here.
Budgeting
If I were to budget myself the only other monthly expensive will be the animation programs I use. Maya and the Creative Cloud is what I use for free from my university and Clip Studio Paint is what I paid for a one-time purchase. After university ill must start paying monthly on both Maya and Adobe Creative Cloud. Luckily for me there are many alternatives for Adobe which is free but for Maya there is not much other than Blender, but I want to stick with Maya anyway. I did another spread sheet where I would be living on my own.
With this added with Mayas yearly pay I would be paying £28,164 a year but with National Insurance I would be paying £32,688.20 a year.
