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A guide on how to become a freelancer in the UK

6-minute read

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

Jessie Day

10 May 2021

According to The Association of Independent Professionals and the Self-Employed (IPSE), there were 2.2 million freelancers in the UK in 2020.

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, you can make a living from that passion.

It’s getting paid to do what you love – 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 on what UK businesses need to look out for at the moment. Use it to make becoming a freelancer a reality.

Shift your perspective before becoming a freelancer

If you’re leaving a job to start your own business, or you’re even a student mulling over next steps, you should 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 utility bill? 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 on the right track.

Working freelance requires discipline

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, write a business 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 oriented.

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 your 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 your freelancer fees and rates

Working out how much you’re going to charge is possibly the most important part of becoming a freelancer. Your earnings could come in either as flat project-based fees, or as daily (or hourly) rates.

Do some basic research and get a sense of the going rate for your services or skill set. 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 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?

Check out our in-depth article, covering the difference a sole trader or limited company. It sets out the essential distinctions between the two, along with 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 that you set up a limited company.

Line up your first freelance 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 on becoming a freelancer, getting organised now will pay off down the line, and prevent lengthy call-waiting times with the HMRC helpdesk.

Get freelance 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 freelance insurance that’ll give your fledgling business protection like:

Plus, there are plenty more covers that might be specific to your business.

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

Going freelance: what’s your trade?

As mentioned, setting up as a freelancer lets you make a business out of a hobby or passion.

With this in mind, we have a number of tailored guides depending on your trade:

If there’s a trade you’d like to see in the above list, let us know in the comments below.

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

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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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