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A guide on how to become a freelancer in the UK

5-minute read

A guide on how to become a freelancer in the UK
Jessie Day

Jessie Day

1 July 2019

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According to the Office for National Statistics (ONS), the number of people choosing to go self-employed increased from 3.3 million in 2001 to 4.8 million in 2017.

If you’re thinking about joining their ranks, be sure to read this comprehensive guide on how to become a freelancer.

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From tax and sourcing clients to insurance and structure, here’s our top advice.

Becoming a freelancer (and having a successful first year)

Whether you’re experienced in your field or a graduate fresh out of training, becoming a freelancer could be the most rewarding thing you’ll ever do.

Hopefully, like so many of the small businesses we help to insure, you’re passionate about your craft. And if you understand how to market it, becoming a freelance photographer, writer, or whatever you choose, lets you make a living from that passion.

It’s getting paid to do what you love, and who wouldn’t want that?

The difficulty, of course, lies in how to make the decision, get the ball rolling and maintain that passion when you’re six months (or six years) in.

Here’s our checklist for how to go freelance, focused as usual on the current watch points for UK businesses. Pin it to your fridge and make becoming a freelancer a reality.

Give yourself a reality check

If you’re leaving a job to start your own business, or even as a student mulling over next steps, you need to prepare for a shift in perspective. Think about the responsibilities, commitments, and personal ‘non-negotiables’ that, when combined, map out your lifestyle and circumstances.

The obvious things are family commitments and financial responsibilities.

With a regular paycheque you have income, and often as a result of that secure income you start building up liabilities – things like rent or a mortgage, plus all those direct debits you know are going to go out each month, usually as soon as you’ve been paid.

Some of these might be more trivial, for example a gym membership or Netflix account, but what would happen if you missed a car payment? Are you in the middle of any building work? Paying childcare fees or getting a credit card under control?

If you’re giving up a regular salary, make sure you have a complete picture of your income and outgoings, and minimise the risk of missed payments. Read our guide on how to become a freelancer: the costs to keep in mind to set you off on the right track.

Get disciplined

Becoming your own boss literally means ‘being boss’. If you’re largely based from home, there’s no manager to report into, no sick leave record and definitely no work dress code for your kitchen table.

Without the usual workplace rules and boundaries, it’s important to work out how to go freelance and stick to a productive routine in the process.

For some people freedom is great, especially if you’re a good self-motivator. But for many, complete flexibility can take a while to get used to.

Before you hit day one of freelance life, create a plan. Give yourself a firm goal for billable hours to clock up in the first quarter, or a target for how much you need to invoice. Even if you tweak these once you get going, the goal itself can be enough to keep you on the straight and narrow.

If nothing else, try to stick to your routine, minus the commute. There may be lots of lovely photos of freelancers in their pyjamas working from bed, but is this going to work in reality?

Set the alarm, have a decent breakfast – and get dressed.

You could even consider arranging with a client to work from their office once a week, to add a bit of expectation and structure.

Work out how much you’re going to charge

This is possibly the most important part of becoming a freelancer: you need to work out how much you’re going to charge, either as a flat project-based fee, or as a daily (or hourly) rate.

Do some basic research and get a sense of the going rate for your services or skillset. Of course, it’s going to depend on your level of experience, but there’s no sense in charging rock-bottom rates only to find that a few months later you can't afford to pay your bills.

Remember the importance here of building up a good reputation and referrals. Earn the respect and trust of a group of solid clients with reasonably-charged work, executed to brief, on time and to a high standard.

Working out how to become a freelancer who’s indispensable to your clients will be the key to your self-employed success.

Sole trader or limited company?

First things first, check out our in-depth article, covering how to go freelance as a sole trader or limited company. It sets out the essential differences between the two, along with some pros and cons.

You’ll need to decide on this point before registering with HMRC.

Typically, sole traders have less paperwork and more privacy than limited companies (although don’t underestimate the work you’ll be putting into your annual tax return). They do however carry all of the risk, for example debt and other financial liabilities.

Read up on what makes sense for your business, and don’t rush into a decision. Ask around your industry contacts and see what’s worked for them in their first few years of trading.

Advice from people already in business can be invaluable, especially if you’re getting conflicting guidance online. Your clients might well guide this decision too, as some larger organisations may require you to be a limited company to work with you.

Line up your first clients

Learning how to sell your skills is all part of becoming a freelancer. Be realistic about how much work you can take on as one person.

But before you take the plunge and become your own boss, it’s important to have some idea of who your first clients might be, or where to find them.

Get to know your target market and do some research. For example, if you’re working out how to become a freelance designer, enquire with a few local businesses about who they employ to create their publicity flyers, posters, or even website.

If they’re doing it themselves, consider offering an introductory rate and showing them how good you are. Repeat business is the least of it, as they might well recommend you to other local contacts.

Check out our article on how to become a freelancer or small business, and the section on knowing your pipeline.

Marketing plays its part too, but word of mouth, smart networking, and a few meetings while still employed (in your own time, of course) can really help to get things moving.

Register for tax with HMRC

It’s a non-negotiable and it pays to understand your responsibilities early on: register with HMRC as soon as you’re up and running. This is an essential step regardless of your business structure, and something you can manage mostly online.

One top tip here: make sure you have an easy-to-locate email folder, as well as a paper-based one, for all your early communications with HMRC. As you connect with them to pay tax across the year, you’ll need to provide certain details and login codes, and it can be tricky to locate everything.

If you’re full steam ahead to becoming a freelancer, getting organised now will pay off down the line, and prevent lengthy call-waiting times with the HMRC helpdesk.

Get insurance

If you’re largely working from home, a typical home and contents insurance policy might not cover you for your business activities.

So it makes sense to look at tailored business insurance that’ll give your fledgling business things like professional indemnity insurance (in case you give faulty advice that causes financial loss to a client), business equipment insurance, and other covers associated with your specific trade.

We’ve answered lots of the most common questions around insurance for freelancers in our FAQ section. Make it a key part of your how-to-become-a-freelancer checklist.

Got a burning how-to-go-freelance question? Ask away in the comments.

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As the UK's biggest business insurance provider, we protect the self-employed workers who're building Britain. Why not take a look now and build a quick, tailored freelancers insurance quote?

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We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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