How to Start Freelancing in the UK

Why Go Freelance?

Freelancing in the UK has grown significantly over the past decade, with millions of self-employed workers contributing to the economy. The appeal is clear: flexibility, autonomy, and the potential to earn more than in traditional employment.

Before taking the leap, consider what's driving your decision. Common motivations include:

• Flexibility – Choose when and where you work
• Variety – Work with different clients across various projects
• Income potential – Set your own rates and take on as much work as you can handle
• Specialisation – Focus deeply on skills you enjoy
• Work-life balance – Design a schedule that fits your life

However, freelancing also comes with challenges. You'll need to manage inconsistent income, handle your own taxes, find clients continuously, and miss out on employee benefits like sick pay and paid holidays. Going in with realistic expectations helps you prepare for both the opportunities and obstacles ahead.

Choosing Your Niche

Your niche determines your target clients, pricing potential, and marketing approach. While it's tempting to offer everything to everyone, specialists typically command higher rates and attract better clients.

To identify your niche, consider:

• Your existing skills – What do you do well? What have you been paid for before?
• Market demand – Are businesses actively seeking this service?
• Competition levels – Can you differentiate yourself?
• Your interests – Will you enjoy this work long-term?
• Earning potential – Can you charge enough to meet your income goals?

Popular freelance categories in the UK include web development, graphic design, copywriting, marketing consulting, bookkeeping, photography, and virtual assistance. Within each category, you can specialise further—for example, becoming a copywriter who focuses exclusively on SaaS companies or a web developer who only builds WordPress e-commerce sites.

Legal Requirements: Sole Trader vs Limited Company

In the UK, you'll typically choose between two business structures: sole trader or limited company. Most new freelancers start as sole traders due to the simplicity.

Sole Trader

As a sole trader, you and your business are legally the same entity. Setup is straightforward—you simply register with HMRC for Self Assessment. You keep all profits after tax and have minimal administrative requirements. However, you're personally liable for any business debts.

Limited Company

A limited company is a separate legal entity. You become a director and potentially a shareholder. This structure offers limited liability protection and can be more tax-efficient at higher income levels. However, it requires more administration, including filing annual accounts with Companies House.

For most freelancers earning under £50,000-£60,000 annually, starting as a sole trader makes sense. You can always incorporate later as your business grows. Read our detailed comparison in Sole Trader vs Limited Company.

Registering with HMRC

You must register with HMRC as self-employed if you earn more than £1,000 from self-employment in a tax year. You should register as soon as you start freelancing, and you must register by 5 October following the tax year in which you started.

Registration is done online through the Government Gateway. You'll need:

• Your National Insurance number
• Your personal details (address, date of birth)
• Details about your business (what you do, when you started)
• Contact information

After registering, you'll receive your Unique Taxpayer Reference (UTR) number by post within 10 working days (or 21 days if you're abroad). This 10-digit number is essential for filing tax returns and sometimes requested by clients or agencies.

For step-by-step instructions, see our guide on How to Register as Self-Employed.

Setting Up Your Systems

Before taking on clients, establish basic business systems:

Banking

While not legally required for sole traders, a separate business bank account makes bookkeeping vastly easier and looks more professional. Many UK banks offer free business accounts for sole traders. See our guide on business bank accounts for freelancers.

Accounting and Invoicing

Track all income and expenses from day one. You'll need these records for your Self Assessment tax return. Choose accounting software that handles invoicing, expense tracking, and tax calculations. Keep receipts for all business expenses—digital copies are acceptable.

Contracts and Terms

Draft a standard contract or terms of service. Include payment terms, scope of work, revision policies, and cancellation clauses. While templates exist online, consider having a solicitor review your documents, especially for high-value work.

Workspace

Establish where you'll work. This might be a home office, co-working space, or coffee shops. If working from home, you may be able to claim some costs as allowable expenses.

Finding Your First Clients

Your first clients often come from your existing network. Before launching publicly:

• Tell everyone you know – Friends, family, former colleagues, LinkedIn connections
• Update your LinkedIn – Make your freelance services clear
• Reach out to past employers – They may need freelance help
• Join relevant communities – Industry groups, local business networks, online forums

For ongoing client acquisition, consider:

• Freelance platforms – Upwork, PeoplePerHour, Fiverr (useful for building reviews)
• Agency partnerships – Work with agencies who subcontract work
• Direct outreach – Contact businesses who might need your services
• Content marketing – Blog posts, social media, or YouTube showcasing your expertise
• Referrals – Happy clients recommending you to others

First Steps Checklist

Use this checklist to ensure you've covered the essentials:

Before Your First Client

• ☐ Define your services and niche
• ☐ Set your initial rates (you can adjust later)
• ☐ Register as self-employed with HMRC
• ☐ Open a business bank account
• ☐ Set up invoicing and accounting software
• ☐ Create a basic contract template
• ☐ Update LinkedIn and professional profiles
• ☐ Inform your network you're freelancing

Within Your First Month

• ☐ Receive your UTR number from HMRC
• ☐ Set up a system for tracking expenses
• ☐ Research professional indemnity insurance
• ☐ Create a basic portfolio or case studies
• ☐ Join at least one professional community
• ☐ Set aside money for tax (25-30% of income is a safe starting point)

Ongoing

• ☐ Track all income and expenses
• ☐ Invoice promptly and follow up on late payments
• ☐ Continuously network and seek new opportunities
• ☐ Review and raise rates annually
• ☐ File Self Assessment by 31 January each year

Starting as a freelancer requires preparation, but don't let perfectionism delay your launch. You can refine your systems, rates, and positioning as you gain experience. The most important step is the first one—registering and taking on your first client.