How to use freelancing to subsidise maternity pay
Statutory Maternity Pay is often essential for keeping family finances ticking over while you're on maternity leave. However, the majority of new mothers find their pay significantly decreases after the first six weeks.
Freelancing is a great way to supplement your income, while still retaining the level of autonomy needed to juggle family life. And earning some extra pennies on the side will not affect the maternity pay you receive from your job (as long as you declare it to the tax man).
Here are a few handy tips to get you started.
Become part of the freelance community
The internet is full of advice and support for freelancers on how best to get work within your chosen field, as well as tips on prioritising and time management. The freelance community is massive and a fantastic resource for those just starting out - who better to understand your situation than those who have experienced it?
Furthermore, becoming part of the freelance community will help you get creative and think outside the static-office confines. For example, you could look to build a 'gift economy' relationship, whereby you give a service in exchange for a few hours of child-minding during the more busy periods of the week.
Becoming part of the community will also provide you with a plethora of ideas and creative inspiration for those tired and lagging moments.
Although freelancing is sometimes seen as a risky route to take, progressively more people are choosing it as a more lifestyle-friendly option, particularly for those with young children. With the right support and advice, there is no reason why you too can't take your skills to the market, enabling you to make more money and therefore work fewer hours, determining a schedule that works best for you and your family.
Manage your time
Establishing yourself as a freelancer can be hard work, but nowhere near as tiring as being a new parent. Make sure you don't take on more than you can handle and manage your time and commitments effectively.
A massive bonus of freelancing is that you can determine the hours you work and often are able to work from home. It is advisable to co-ordinate your working hours with your partner, if applicable, so that when you are working you are able to apply yourself fully and ensure you are doing your best work. It may be tempting to grab a half hour around your newborn's sleeping schedule, but this could result in a rushed job, which may mean your client will not return to you with more work.
Know the tax implications
Your wages are likely to significantly reduce during maternity leave, so you may have quite a large area of scope before you reach the total amount you were earning before. This could mean that your taxes will still be less, even with freelance work on the side.
However, the money you earn through freelancing needs to be taxed separately and it is your responsibility to ensure you complete your Self Assessment on time and pay your year's taxes at the end of January.
It is important to be aware of exactly how much extra tax you will need to pay and when to inform HMRC. For more detailed information, have a look at this blog post on the tax implications of freelancing on the side of your job.
Don't be put off by the number crunching though, as there are plenty of online resources to help you. As long as you keep on top of it and keep an up-to-date record of all invoices, you should find the process far less daunting.
If you liked this, you'll love...
This content was provided by Sophie Turton at Crunch Accounting.
Last updated: 25 days ago