How do you become a freelancer?
In principle, you need to do very little to become a freelancer. You need to register as an entrepreneur in the Trade Register of the Chamber of Commerce. Think carefully about your company name and do not forget to check on the Internet whether this company name is in use by another organisation. You can check this in the Chamber of Commerce register.
Because of the tax advantages (more on this later), it is wise to initially start a sole proprietorship. This is also the most common business form among freelancers. It is advisable to also look at the other possibilities such as a private imited company (B.V.) or a cooperative. These forms of enterprise can be useful in the future. It is best to consult an accountant or tax expert about this.
As soon as your registration in the trade register is completed, you will receive your Chamber of Commerce number and you will also be given the option to request a (digital) extract. You must be able to present this as soon as you have won an assignment. With a registration, a VAT number is also applied for (if you are liable to pay VAT) with the Tax and Customs Administration. This VAT number consists of:
- The country code NL
- An RSIN/fiscal number or citizen service number (BSN)
- An addition of 3 characters: B01 to B99
If you have opted for a sole proprietorship, you will receive a VAT number consisting of the country code (NL), your BSN number and B01 as the final characters.
IMPORTANT: From 1 January 2020, a new VAT ID will be required for sole proprietors. The new VAT ID must be used on your website or webshop, invoices and stationery from 1 January 2020. The VAT ID consists of 14 characters: country code NL, 9 numbers, the letter ‘B’ and a 2-digit check digit.
Next, it is important that you arrange for good working equipment. Not every client can provide a laptop and any other requisites for an assignment. An additional advantage is that by using your own work equipment, you can easily keep all business and private activities separate.
Finally, it is important to properly arrange the administrative matters. While not being the most fun part of being an IT professional, it is one of the most important aspects of being an entrepreneur. A thorough administration ensures financial clarity. This is also important if you are going to file the turnover tax return yourself (every quarter). It is advisable to open a business account. This will help you keep your business and private administration clear. If you are particularly handy with numbers and tax rules, you might consider outsourcing this to a bookkeeper or accountant.
TIP: Take a full day off to arrange everything as a starting entrepreneur. An appointment at the Chamber of Commerce and the bank can take (quite) a long time.
In recent years, the laws and regulations for freelancers have changed quite a bit. Previously, a VAR declaration was sufficient to start working for a client. However, this declaration was replaced on 1 May 2016 by the Assessment of Employment Relationships (Deregulation) Act. This law was created to better combat sham self-employment.
The biggest difference with the VAR declaration is that instead of only the professional, now also the client runs the risk of being taxed. A good model agreement is crucial to limit all risks as much as possible. That’s why Maandag® IT works with the which have been drafted by Bovib and approved by the Tax and Customs Administration. This way we cover the whole chain with certainty.
If you are just starting out as a freelancer it is important to get an assignment as soon as possible. After all, if you don’t have an assignment, you don’t have any income. You have to actively look for clients. Your network can play a major role in this. An important way to expand your network is to create a LinkedIn profile and profile yourself professionally on the Internet. You can expand this by creating a professional business website with more information about the services you offer as a professional.
Of course, there are more possibilities to find a challenging assignment. There are intermediary agencies (like Maandag® IT) who often have the right contacts and assignments that suit you. Besides that an intermediary agency can take care of administrative matters. For example, we at Maandag® IT can take care of the whole contract process (using an approved model agreement) and we support you with the financial part of the assignment. That gives you the freedom to focus on what you are really good at. Namely, making the client happy!
It is important that when you are looking for an attractive assignment, you do not immediately register with dozens of intermediary agencies. It can happen that when you register, you automatically give permission to be offered to clients. This can be very disadvantageous with regard to rate, duration of the assignment and other conditions. It is therefore advisable to use a maximum of three good intermediary agencies and to maintain good contacts with these agencies. In this way, you create a higher award factor and expand your ever-growing network even faster.
Of course, there are many more opportunities to get assignments as a (starting) freelancer. Curious about these possibilities? Then contact us and click on the button below!
As a self-employed person, you are not automatically entitled to tax benefits. It is important that the Tax and Customs Administration sees you as an entrepreneur. And that is slightly different from being an entrepreneur for VAT purposes.
If you want to make use of the favourable tax schemes, such as the tax allowance for self-employed persons and starters, you must meet certain conditions. One of the conditions is the hour criterion. You are expected to work 1225 hours for your own organisation in a year. This comes down to an average of 24 hours a week. This may seem a lot, but if you have won an assignment, you will soon reach this. In addition, you may also count working hours that are not billable. Think of hours you put in your administration or in your own website.
Insurances and your pension
In addition to the many advantages of self-employment, there are also some disadvantages. For example, you do not automatically build up a pension and if you are unable to work due to illness or other hardship, there is no income.
To start with the insurances. There are several insurances that can ensure that you still have income in case of illness. However, these insurances are very expensive (€600 to €1200 per month). In addition, there are many rules that lead to a reduction in benefits. Therefore, it is important to consider putting this money aside each month. This way, there is still a source of income in case of illness. However, these insurances are not compulsory.
It is also important to have company liability insurance. Since the introduction of the Assessment of Employment Relationships (Deregulation) Act this has become a requirement to be able to start working for a client. Fortunately, these insurances are quite cheap (about €120 a year).
Then there is the pension. If you choose not to actively arrange something for your old age, you will soon only be entitled to a state pension (AOW). For most households that is often not enough, which is why many freelancers try to build up a supplementary pension.
This can be done in various ways. You can take out an annuity insurance, put money aside via the tax-deferred retirement reserve (FOR) or, more traditionally, deposit a fixed amount every month on a separate savings account.
Would you like to become a freelancer with Maandag® IT?
At Maandag® IT we are available day and night to support you as a (starting) freelancer. We do this by, if desired, paying the first invoice earlier and by giving consults and trainings to profile you as a real entrepreneur. Would you like more information? Contact one of our recruiters directly at 010 840 9999 or send us a message.