Avoid these mistakes before you start freelancing– you could lose your gig or get sued if you don’t

By Katherine Steiner-Dicks Last updated Sep 27, 2022

Before you go freelance even part-time avoid these costly mistakes/Photo by Alex Green via Pexels

Going freelance full or even in your free time is a great way to build an additional income. Before you do though make sure you are not in breach of an existing working contract. You could pay dearly with your livelihood and reputation if you don’t.

To make ends meet, many people in temporary or even full-time employment may want to start a side gig, “go freelance” or form a startup. It seems to be the thing to do these days, but with newly announced reforms to IR35 being repealed and starting in April 2023, many people may start a separate freelance job without releasing it goes against their existing contract. This could jeopardise their current contract and even salary.

Some people may think that they can cheekily sneak in freelance work at their place of employment, or even on their lunch break, but could be very mistaken. In countries like Germany there have been reports of cases where software developers have been fined and sued for carrying out freelance work at their place of employment. Months of salary had to be paid back to the employer when the staff member was caught red handed carrying out freelance work on their employer’s dime.

Depending on your employer, fixed contract client and the country you work in, your employer could even have intellectual rights to any work you carry out in their workplace, on their equipment or perhaps even on the set days you work for them if you work remotely.

Going freelance can be liberating, just make sure you do your homework before you start/ Photo by Anna Tarazevich from Pexels

Here are things to consider before you go freelance

If you are on any form of employment contract no matter how many hours per week, check the fine print about the company’s policy on working anywhere else, even in a freelance capacity. If in doubt, ask the HR or legal team or your recruitment agency. Be prepared with a response if they ask why you are asking and if your freelance work will be a conflict of interest with your salaried work.
Ensure that if you do carry out freelance work on weekends it is not with a competitor to your existing employer and/or carried out on employer equipment. It could bring a lawsuit on if they believe you are giving away intellectual property (IP) or precious data.
If you purchase anything related to your freelance business keep the receipts as they could be tax deductible as expenses, for example, a new laptop, insurance, cybersecurity software, other supplies and equipment, etc.
Set up a separate company for any permissible freelance work and look into getting limited liability insurance, especially if you are working on a client’s intellectual property. This could protect you against future lawsuits if you are a victim of a cyberattack with your client’s work on your computer. Ask your freelance client if they have a secure server on which you can transfer and submit work on.
If you want to balance a part-time job with your current employer with a view to going freelance on your days off, discuss this with HR. They may welcome the idea or may discourage you. Be prepared either way.
Always have a contract with each freelance client that spells out your daily or project rate (the latter is sometimes preferred), the type of work to be carried out and the freedom to carry out that work when and where you want (remotely/at home).

Freelancer templates

IR35 Contract Templates – IR35 Resources – Qdos Contractor

Independent Contractor Agreement | Free Contractor Template (UK) | LawDepot

Do not over-deliver if you aren’t getting paid for it. This may sound counterproductive when trying to impress new clients, but new freelancers often have a habit of giving their time away for free; doing extra work that isn’t outlined in the job brief or role. Don’t compromise on quality, but keep an eye on the quantity of time you are spending on any one client or project.
Only take on the amount of work you can handle and deliver well. Discuss that you would love to take on the work but have other commitments up until a certain date. The client may be able to budge their deadline to accommodate you. But if not, that is just how freelancing works.
Do not be afraid to add a payment due date on your invoices. Freelancers have a right to be paid within 30 days of the date of invoice/date invoice sent. What is the Prompt Payment Code?
Save time on marketing your freelance skills and experience by creating a freelance portfolio on LinkedIn, on a freelancer portal or on your own website or even social media. In the beginning, choose a website template to save on time and money. How to get your freelance portfolio in front of more prospective clients and agencies