The complete guide to starting a freelance business (UK edition)

Key takeaways

• Learn how to set up a freelance business in the UK, step by step.

• Understand how to register with HMRC and manage your taxes.

• Get advice on choosing a niche and setting realistic freelance rates.

• Find out how to build a simple business plan and brand yourself professionally.

• Explore ways to find clients, market your services and get paid on time.

• Discover tools and systems to save time and stay organised.

• Hear from real UK freelancers who've built successful businesses on their own terms.

You've decided to go freelance. Or maybe you're still thinking about it. Either way, you're here because you want to work for yourself and make it work.

You probably already know what you're good at. What you might not know is how to turn that into a business.

• Do you register with HMRC straight away?

• Do you need a website?

• How do you even find your first client?

That's what this guide is for. It covers the steps most people miss, the ones they overcomplicate and the ones no-one explains properly.

It'll show you how to get set up, how to run things day to day and how to build something solid – even if you're starting from zero.

You'll also hear from freelancers who've done it themselves. Not overnight, not perfectly, but properly.

1. Deciding if freelancing is right for you

Freelancing gives you flexibility and control, but it also means being your own boss – managing your time, finding clients and handling everything from invoices to marketing.

You'll need to be self-motivated, organised and comfortable with a bit of uncertainty (especially in the early days).

What does a freelance business look like?

A freelance business can take many forms, depending on your skills. Some common examples include:

• copywriting or content creation

• graphic or web design

• marketing consultancy

• social media management

• photography

• working as a virtual assistant

• coaching or training

You might already be doing some of this work on the side – or perhaps you're starting from scratch after a career change.

Take Steve Folland, for example. After years working in radio, he started freelancing to gain more flexibility around family life.

What began as a solo venture eventually grew into Being Freelance, a podcast and online community supporting thousands of freelancers across the UK.

For Steve, the shift wasn't just about earning a living – it was about creating a life that worked on his terms.

Questions to ask yourself

To decide if freelancing is the right step, ask:

• Do I have a skill people would pay for?

• Am I comfortable working independently?

• Can I manage my own time and finances?

• Am I willing to market myself and find clients?

If you're nodding along, you're already on the right track.

2. Choosing your freelance niche or service

Choosing a niche is one of the most important decisions you'll make when starting a freelance business. It influences:

• how you market yourself

• who you work with

• how much you earn

• how sustainable your business will be in the long run

Many new freelancers worry about picking the "perfect" niche – but the goal isn't to get it right straight away. It's to choose something viable enough to test, learn from and build on.

What is a freelance niche?

A niche is the intersection between:

• what you do (your service)

• who you help (your audience)

• what problems you solve (the value you offer)

For example:

• a copywriter who writes SEO blog content for health and wellness brands

• a virtual assistant who supports coaches with managing their inbox and diary

• a brand designer who helps ethical fashion start-ups create visual identities

The clearer your niche, the easier it is for potential clients to know you're the right fit.

How do I choose the right freelance niche?

Here are key steps to help you narrow your focus:

List your marketable skills

Start by writing down the tasks you enjoy and are skilled at – whether from past jobs, personal projects, education or volunteering.

Think in terms of services people pay for:

• Writing and editing

• Graphic or web design

• Digital marketing or SEO

• Social media management

• Admin and customer service

• Photography or video editing

• Coaching or tutoring

Research demand

Look at freelance job boards (for example, Upwork, Freelancer, PeoplePerHour), LinkedIn job posts, and local business directories. Ask:

• Are people hiring for this service?

• What types of clients are paying?

• Are there enough opportunities?

Understand your audience

Who needs your help? What type of businesses or people would value your service – and be willing to pay for it regularly?

Check the competition

Google potential service + location or niche (for example, "freelance illustrator UK") and see who else is offering similar services. How are they positioning themselves? What can you do differently or better?

Test and refine

Start with a clear offer, then test it in the real world. Speak to potential clients, offer your service on freelance platforms or take on a small project. You'll learn quickly what works and what doesn't.

Popular freelance business ideas in the UK

If you're not sure where to begin, here are in-demand freelance business types that work well in the UK market:

• Content writer/copywriter (blogs, ads, web content)

• Social media manager

• Virtual assistant

• Graphic or brand designer

• Website designer/web developer

• SEO specialist

• Email marketing consultant

• Photographer or videographer

• Online tutor/course creator

• Business, mindset or career coach

• Podcast producer/editor

• PR or media consultant

You can narrow each of these further to suit different industries or types of clients.

A real-life example: Building a business with purpose

Claudine Curran transitioned into freelancing after a career in geology. With a passion for design, she retrained and launched Curran Design, specialising in brand identity for small businesses.

Instead of trying to offer every type of design service, she focused her energy on branding – a decision that allowed her to build a strong portfolio, attract ideal clients and confidently grow her business, even while juggling the demands of solo self-employment.

Final tip – start narrow, then expand

Being too broad makes it harder to stand out. Being too niche can limit opportunities. Start with a focused offer that solves a specific problem – and then broaden or evolve as you gain clarity, confidence and insight into your market.

3. Creating a simple freelance business plan

Think of your business plan as a living document that helps you stay aligned with your goals, your audience and the service you're offering. It's especially useful when you're managing everything yourself.

Skipping this step entirely can leave you unfocused, overwhelmed or unprepared when challenges arise.

What do you need to start a freelance business plan?

Here's a practical structure to follow:

Your service offer

Define clearly what you offer, and how it benefits your ideal client. For example:

• "I offer monthly blog content for small UK e-commerce brands, designed to improve SEO and increase traffic."

• "I provide admin and scheduling support to online coaches, freeing up their time to focus on growth."

Your target client

Describe your ideal client. Go beyond basic demographics – think about:

• their industry or sector

• their needs or pain points

• the goals they're trying to achieve

• where they spend time (LinkedIn, Facebook groups, events and so on)

Your pricing

Will you charge by the hour, by the project or on a retainer? Make sure you:

• research going rates in the UK for your service

• factor in tax, software subscriptions and non-billable hours

• set minimum rates that reflect your value

Many new freelancers undercharge. Use tools like the IPSE average day rates guide to help set fair prices.

Your marketing plan

How will you attract and convert clients?

• Build a website or simple portfolio

• Set up a professional LinkedIn profile

• Network through local events or online groups

• Use freelance platforms to get initial projects

• Ask for referrals or testimonials from early clients

Start with one or two marketing channels and do them consistently rather than trying everything at once.

Your financial goals

Set measurable goals for income and expenses. For example:

• earn £1,500 per month within six months

• save 25% of income for tax and emergencies

• keep software/tools under £50 a month

Track everything in a simple spreadsheet or accounting tool.

Your personal goals

Why are you freelancing? More freedom? Flexibility? Family time? Being clear on your "why" can keep you motivated when things feel tough.

A real-life example: Growing through a simple, focused plan

Angela Lyons started Lyons Creative after becoming a mum and wanting more flexibility. She didn't build a complex plan, but she knew who she wanted to help – small businesses needing ongoing design support.

She focused on client satisfaction and consistency, building long-term relationships that led to a steady stream of referrals.

Later, as she grew, she refined her strategy – attending Google Digital Garage sessions, learning how to blog for visibility and using tools like Google Trends to shape her messaging.

Angela's story shows how even a modest business plan can evolve into a long-term strategy for success.

4. Registering your freelance business in the UK

Once you've decided what to offer and who to serve, the next step is making your freelance business official.

Registering as self-employed is a key part of setting yourself up legally and financially.

This section covers what you need to do to comply with UK law, get paid properly and avoid trouble with HMRC later on.

What do you need to start a freelance business in the UK?

If you're working for yourself and earning money, even if it's part-time or on the side, you may need to register as self-employed.

Here's a checklist of what you'll need to do:

Register as self-employed with HMRC

The most common structure for freelancers in the UK is sole trader. This means:

• you run the business as an individual

• you keep all your profits after tax

• you're personally responsible for any debts

To register:

• go to the HMRC website

• create a Government Gateway account (if you don't have one already)

• register as self-employed

• HMRC will send you your unique taxpayer reference (UTR)

Deadline: You must register by 5 October in your business's second tax year – but it's best to do it as soon as you start earning.

Some freelancers eventually choose to set up a limited company for tax or legal reasons. This offers limited liability (your business is legally separate from you), but comes with extra admin and reporting requirements.

As a new freelancer, it's often simpler and more cost-effective to start as a sole trader. You can always switch later as your income grows or circumstances change.

Do I need a business name?

No – you can trade under your personal name. But if you want to create a brand identity, you can choose a business name as long as:

• another company isn't already using it

• it doesn't contain sensitive or offensive words

• it follows Companies House naming rules (even as a sole trader)

Even if you don't register the name, you can still use it for branding purposes on your website, email signature and invoices.

Open a business bank account

The law doesn't say sole traders must open a business account – but it's highly recommended.

Keeping your business and personal finances separate makes it easier to:

• track your income and expenses

• complete your tax return

• prove income for mortgage or loan applications

Most major UK banks offer freelancer accounts, and there are great digital options like Monzo Business, Starling Bank and Tide.

Understand your record-keeping responsibilities

Freelancers must keep records of all income and expenses – for at least five years after the 31 January submission deadline of the relevant tax year.

Keep copies of:

• invoices you've issued and received

• receipts for business items you've bought

• bank statements

• tax returns and correspondence with HMRC

Using a tool like Sage Accounting, QuickBooks or FreeAgent, or a simple spreadsheet, can help you stay organised. (Go to section 5 for more information on record-keeping.)

Prepare to pay tax

As a sole trader, you'll file a Self Assessment tax return each year and pay:

• income tax on profits above your personal allowance (£12,570 for 2025/26)

• Class 2 and Class 4 National Insurance contributions

You'll need to:

• track your income and expenses

• submit your return by 31 January

• pay your tax bill in full by the same date (and possibly make payments on account for the following year)

If your annual turnover exceeds £90,000 (the threshold for 2025), you must also register for VAT. But most new freelancers don't need to worry about this immediately. (See section 5 for more information on business taxes.)

A real-life example: From admin overwhelm to confidence

When Claudine Curran launched her design business, she found the admin side of freelancing surprisingly challenging.

"You go from being a creative to suddenly having to manage tax, marketing, contracts – all on your own."

But instead of letting it stall her progress, Claudine got support from online communities, attended free webinars and gradually built her confidence.

"Taking it step by step made it manageable. It's not about knowing everything – just knowing your next move."

Her experience is a powerful reminder: you don't need to have it all figured out on day one. But you do need to register properly, keep good records and understand your basic legal obligations.

5. Sorting out taxes, insurance and legal basics

Once you've registered your freelance business, you must get your financial and legal foundations in place.

Freelancing gives you independence, but it also means you're responsible for keeping to UK tax law, protecting yourself with the right insurance and using contracts that safeguard both you and your clients.

In this section, we'll cover the key things you need to manage as a self-employed freelancer in the UK – and explain them in plain English.

How do taxes work for freelancers in the UK?

If you're working as a sole trader, you'll need to file a Self Assessment tax return with HMRC each year.

This involves declaring your business income and expenses so you can pay the correct amount of tax and National Insurance.

Key points:

• Your personal allowance (the amount you can earn before paying income tax) is £12,570 for the 2025/2026 tax year.

• Anything over that is taxed in bands (for example, 20% basic rate up to £50,270).

• You'll also pay:

  • Class 2 National Insurance if you earn more than £6,725/year (£3.45 per week)

  • Class 4 National Insurance on profits above £12,570 (at 9% for earnings up to £50,270, then 2%)

Deadlines to remember:

• 5 October – register for Self Assessment if you haven't before

• 31 January – file your return and pay your tax bill for the previous tax year

Use accounting software like Sage Accounting, QuickBooks or FreeAgent to keep things simple. These tools can link with your bank account, track expenses and estimate your tax bill in real time.

What records should I keep?

HMRC requires you to keep accurate records of:

• income (invoices issued, payments received)

• business expenses (software, travel, marketing, equipment and so on)

• bank statements

• mileage logs (if you're claiming travel expenses)

• any tax correspondence

Keep these for at least five years after the 31 January deadline of the relevant tax year.

Having good records keeps you within the law. But it also gives you a clearer picture of how your freelance business is performing and helps when applying for loans, mortgages or grants.

Do I need to charge VAT?

You only need to register for VAT if your taxable turnover exceeds £90,000 in any rolling 12-month period (correct as of 2025).

Some freelancers choose to register voluntarily to appear more established or reclaim VAT on business purchases. But for most, it's unnecessary in the early stages.

What insurance do freelancers need?

While not all types of insurance are mandatory, having the right cover in place protects your business and your peace of mind.

Here are the main types to consider:

Professional indemnity insurance

• What it covers: Claims arising from mistakes, bad advice or negligence

• Who it's for: Writers, designers, consultants, marketers

Public liability insurance

• What it covers: Injuries or property damage caused during work

• Who it's for: Freelancers who meet clients in person or work on-site

Business equipment insurance

• What it covers: Theft, damage or loss of essential tools (such as a laptop or camera)

• Who it's for: Anyone relying on expensive kit

Cyber insurance

• What it covers: Data breaches, hacks or online fraud

• Who it's for: Freelancers handling client data or working online

Income protection insurance

• What it covers: Replaces income if you're unable to work due to illness or injury

• Who it's for: Anyone who relies on their income as a sole trader

While insurance adds to your business costs, it can save you thousands if something goes wrong – and some clients won't work with you unless you're properly insured.

Do freelancers need contracts?

Yes – always. Even if you're working with a friend or a "small job", a clear contract protects both you and the client. It reduces misunderstandings, outlines expectations and provides legal protection if a dispute arises.

Here's what a good freelance contract should include:

• Scope of work (what's included – and what's not)

• Timeline or deadlines

• Fees and payment terms (how much, how often, late fees)

• Ownership and usage rights (especially for creative work)

• Termination clauses (how either party can end the agreement)

You don't need a solicitor to get started. Use a solid freelance contract template (there are lots of examples on Google), then adapt it for each new client.

What about GDPR?

If you collect or store personal data – even an email address or phone number – you must comply with the data protection rules laid out in GDPR and the Data Protection Act 2018.

As a freelancer, this often means:

• getting consent to collect client data

• keeping that data secure

• only using data for its intended purpose

• registering with the Information Commissioner's Office (ICO) – if you handle personal data regularly (cost: £40/year)

If you're running email lists, saving client info or collecting leads through your website, it's worth brushing up on GDPR basics and registering with the ICO.

What about business post, address or phone?

You don't need to rent an office, but having a professional set-up helps build trust. Consider:

• a virtual office address (if you don't want to use your home address)

• a separate phone number or work email

• a business mailing address for invoices and correspondence

These little touches can make you look more established – and protect your privacy as a home-based freelancer.

6. Building your brand and online presence

Having a strong online presence is how clients find you, trust you and decide whether to work with you.

Even if you're just starting out, building your freelance brand helps establish credibility and creates opportunities for consistent, high-quality work.

You don't need to be everywhere. But you do need to be visible, clear about what you do and present yourself professionally online.

What is a freelance brand?

Your brand is more than a logo or colour palette. It's the overall impression you leave – how people describe you when you're not in the room.

It includes:

• your tone of voice and how you communicate

• your values and what you stand for

• your style, design and consistency across platforms

• your client experience (from first contact to final delivery)

Think of your brand as your reputation – crafted intentionally.

Choose a business name (or use your own)

Many freelancers use their own name, especially in service-based roles like writing, design or consulting.

It's personal, flexible and often easier to manage legally (no trademark issues or need to register a business name).

However, if you want to create a studio-style brand or keep your personal and business identities separate, you can choose a distinct business name. Just make sure it:

• isn't already in use (search Companies House and domain registrars)

• reflects your niche and tone

• can grow with your business

Angela Lyons, for example, trades as Lyons Creative – a name that feels professional, brand-friendly and flexible enough to evolve into a larger studio, should she choose to scale.

Create a simple website or portfolio

Even a one-page website can make a big difference. At the very least, your freelance website should include:

• who you are and what you do

• what services you offer (ideally with pricing or examples)

• who you help (for example, "I support sustainable businesses with their social media content")

• client testimonials or work samples

• a clear contact method

You can build a great starter site using platforms like:

• Carrd (simple, one-page sites)

• Wix, Squarespace or WordPress

• Notion (as a portfolio-style landing page)

If you don't have any client work yet, create mock projects to showcase your skills – for example, redesign a local café's logo or write blog posts for an imagined brand in your target niche.

Set up key online profiles

Many UK freelancers land their first clients through platforms they already use. Make sure your professional profiles reflect your freelance brand:

LinkedIn

• Add "Freelance [Your role]" in your headline.

• Use the "Featured" section to highlight portfolio pieces.

• Connect with people in your industry or niche.

Instagram (for visual creatives)

• Share your work in progress, tips or behind-the-scenes content.

• Use relevant hashtags and geotags to reach your UK audience.

Twitter/X

• Share industry insights or engage with thought leaders in your space.

Freelance platforms

• Create profiles on PeoplePerHour, Upwork or Fiverr Pro

• Treat them like a landing page – with well-written bios, portfolio items and reviews

Steve Folland initially found freelance work through traditional networking, but his long-term success came through community and content.

His podcast Being Freelance became a magnet for fellow freelancers – building both trust and visibility in his niche. His story is a reminder that sharing what you know online builds authority over time.

Start creating content (optional but powerful)

If you want to attract inbound leads (clients coming to you), consider building a content strategy. You could:

• write blog posts answering common client questions

• share tips on LinkedIn or Instagram

• start a simple newsletter

• make short videos explaining what you do and who it helps

Angela Lyons used free resources like Google Digital Garage to learn how to blog more effectively, discovering how content aligned with SEO and helped her get found online.

She saw content creation not as "marketing" but as generous teaching – and it paid off in new leads.

Final tip: Be findable, relatable and trustworthy

Your brand and online presence should reflect who you are, who you help and why someone should choose you.

You don't need to look like an agency – just focus on showing up clearly and consistently.

As a freelancer, you are the brand. So don't be afraid to inject a bit of personality into your content, your website and your outreach.

People hire people they trust – and trust starts with visibility and clarity.

7. Finding clients and marketing your freelance business

Many new freelancers say the same thing: "I know what I can offer – but how do I actually find clients?"

It's one of the biggest hurdles when you're starting out, especially if you don't have an existing network or prior client experience.

There's no single "right" way to find freelance work. Most successful freelancers use a mix of methods to attract clients – some that bring leads to them over time (like content or SEO), and some that involve reaching out directly.

In this section, we'll look at the key ways to find freelance clients and market your business effectively in the UK.

Where do freelance clients come from?

Here are the most common sources of freelance work:

• Personal network: Friends, ex-colleagues, family or acquaintances

• Referrals: Happy clients recommending you to others

• Freelance platforms: Upwork, PeoplePerHour, Fiverr Pro, Toptal

• Social media: LinkedIn, Instagram, X (Twitter), Facebook groups

• Inbound marketing: Your website, blog, SEO, lead magnets or newsletter

• Cold outreach: Targeted emails or DMs (direct messages) to potential clients

• Events and networking: Local business meet-ups, co-working spaces, trade shows

As a new freelancer, you'll likely start with proactive methods (outreach, platforms, networking), then build toward more passive methods (content, SEO, referrals) as your reputation grows.

Start with your network

Even if you feel like you don't know anyone, you probably do. Let people know what you're doing and how they can support you:

• Post on LinkedIn or Instagram.

• Message former colleagues or friends in relevant industries.

• Offer a discounted or free trial to get your first testimonial.

You don't need hundreds of people – one warm lead can lead to your first paying client.

How Angela found her first clients

Angela Lyons grew Lyons Creative largely through word of mouth. Early on, she worked with small businesses and friends of friends, delivering consistent work that led to referrals.

But she didn't stop there. As she gained confidence, she leaned into online marketing – blogging to share design tips, attending local business events and learning how to use SEO to help her services get found online.

This mix of relationship-building and content strategy allowed her to grow sustainably, without relying on high-pressure selling.

Use freelance job platforms (strategically)

Online marketplaces are competitive, but they can be a great way to gain experience and build momentum – especially if you don't yet have a client base.

Here are some of the top UK-relevant platforms:

• PeoplePerHour – UK-based with local projects

• Upwork – global reach, great for general and technical skills

• Fiverr Pro – better for defined service packages

• Contra – no commission taken from freelancers

• YunoJuno – aimed at creatives and developers

Tips for success:

• Write a niche-specific profile (for example, "I help independent wellness brands create standout logos").

• Use client-focused language, not just your own CV.

• Collect testimonials, even from small jobs.

• Raise your rates gradually as your profile improves.

Try cold outreach (without being pushy)

Cold pitching can feel awkward – but it's still one of the most direct ways to land freelance work. The key is to personalise every message and lead with value.

How to approach it:

1. Research – look for small businesses, founders or start-ups in your niche

2. Find a contact – use LinkedIn, company websites or business directories

3. Send a short email or DM introducing who you are and how you can help

4. Offer something specific – a free audit, an idea or a piece of advice can open the door

Example pitch:

"Hi [Name], I'm a freelance copywriter specialising in hospitality brands. I noticed your site could benefit from more detailed location pages – I'd love to help with that. Let me know if you're open to a quick chat!"

Follow up once or twice, politely, if you don't hear back. Keep it helpful, not salesy.

Build authority through content

Creating useful content is a long-term strategy, but it's one of the most powerful ways to build trust, demonstrate your expertise and attract high-quality clients.

Start simple:

• Blog posts answering common client questions

• LinkedIn posts sharing tips or behind-the-scenes insights

• A newsletter sharing industry trends or useful resources

• Guest posts on relevant industry sites

Steve Folland, founder of Being Freelance, built a community and client base largely through sharing – not selling. His podcast gave him credibility, visibility and a strong network.

Even if you don't launch a podcast, consistently creating content positions you as a go-to expert in your niche.

Join freelance and small business communities

Don't underestimate the value of community. Freelancers often share leads, collaborate or refer work they can't take on.

Some communities to check out:

• Enterprise Nation – business advice, support programmes and events (online and in person)

• IPSE – advocacy, legal support and self-employment resources

• The Being Freelance Community – a friendly network for support, feedback and encouragement

You don't need to network everywhere – but engaging in one or two communities can lead to opportunities you wouldn't find alone.

8. Setting up efficient systems and tools

Freelancers wear many hats – creator, marketer, bookkeeper, project manager, customer support and more.

Without systems in place, the admin can quickly become overwhelming and start eating into your billable hours.

Setting up a few key tools early on can help you save time, stay organised and run your freelance business more professionally.

Whether you're freelancing full-time or part-time, the right systems allow you to focus on your actual work – and spend less energy chasing invoices, tracking hours or digging through emails.

Why systems matter (especially for solo freelancers)

When we spoke to Claudine Curran of Curran Design, she openly shared how the early days of freelancing meant juggling everything herself.

From client emails and deadlines to contracts and tax returns, she found the admin side the hardest to manage – until she began building repeatable processes and using digital tools.

Her experience reflects a common freelancer truth: good systems are about protecting your time, reducing stress and appearing professional from day one.

Tools to save time and stay organised

If you're looking for tools to make freelancing easier, our Freelancer's AI Toolbox has a shortlist worth checking out.

It covers everything from managing your time to handling finances and creating content. Below are some highlights that may be useful as you set up your systems.

Productivity and organisation

• Google Keep – a free note-taking app for quick lists, ideas and reminders that sync across devices.

• Trello (with Butler automation) – organise tasks visually and automate admin like due date reminders or task handovers.

• Calendly – let clients book meetings without the usual back-and-forth. Syncs with your calendar automatically.

Client management and invoicing

• Wave – free invoicing and payment tracking tool, ideal for solo freelancers.

• Dropbox Sign – send and receive legally binding electronic signatures without printing or scanning.

Content creation and marketing

• Canva – build professional visuals, social posts or proposals with drag-and-drop templates.

• Jasper – an AI tool to help write emails, blog posts or captions quickly.

• MailerLite – send newsletters or create email sequences with an easy interface (free for up to 1,000 subscribers).

• BuzzSumo – research trending topics and analyse what kind of content performs well.

Finance and automation

• Sage AI – helps automate invoice processing and tracks your financial performance with real-time insights and dashboards.

You don't need to use everything. Start with one tool in the area you struggle with most – whether that's getting paid, staying on top of tasks or writing content faster.

9. Managing your finances

When you run a freelance business, managing money isn't just about getting paid – it's about staying profitable, prepared and protected.

Unlike salaried roles, your income may vary month to month, and you're responsible for your own taxes, pension, expenses and savings.

This section walks you through the key financial responsibilities every UK freelancer should stay on top of – with tools, tips and mindset shifts to make managing your money feel more empowering and less overwhelming.

Set your freelance rates (without underselling yourself)

One of the most common challenges freelancers face is deciding what to charge. It's tempting to underprice – especially when starting out – but your rates need to reflect both your value and your business expenses.

Factors to consider

• Your skill level and experience

• The complexity and time involved

• Industry standards (use sites like IPSE or Glassdoor for benchmarks)

• Business costs (tools, insurance, tax, pension contributions and so on)

• Profit margin and financial goals

Start by calculating your minimum viable rate:

1. Estimate your monthly business and living expenses.

2. Divide that by the number of billable hours you expect to work (excluding admin, marketing and so on).

3. Add buffer for savings, slow months and tax.

Example: If you need to earn £2,500 a month and can bill 80 hours, your minimum hourly rate is around £31.25 – before tax.

You can also price by project or day, or offer retainer packages – often preferred for long-term client relationships.

Angela's approach to pricing (and adjusting)

Angela Lyons started her freelance design business with relatively modest rates, unsure of what clients would pay and wary of overcharging.

But as her skills grew and her projects became more complex, she realised her pricing needed to reflect her value – not just her time.

By regularly reviewing her rates and getting feedback from trusted clients, Angela gradually increased her fees, which allowed her to work with fewer clients at higher quality – and more predictably.

Her story reminds us that your rate isn't fixed – it should evolve as your experience, results and confidence grow.

Budget for irregular income

As a freelancer, your income may go up and down – so managing cash flow is vital. Try to create systems that bring stability, even when client work fluctuates.

Tips for budgeting

• Use a business bank account to keep business and personal finances separate.

• Pay yourself a "salary" from your freelance income (for example, a set monthly transfer).

• Keep a buffer fund – aim for two to three months of living expenses.

• Forecast your cash flow with a simple spreadsheet or an app like Coconut.

Don't treat all incoming payments as disposable income. You'll need to set aside a portion for tax, software, insurance and savings.

Track your income and expenses

This isn't just about staying legal – it's about knowing if your business is actually profitable. Here's what to track:

• Invoices you've issued and paid

• Software subscriptions and tools

• Marketing spend

• Travel or co-working expenses

• Equipment (for example, laptop and phone)

• Professional services (accountant, legal advice and so on)

Accounting software like Sage, QuickBooks, FreeAgent or Xero can automate a lot of this. And many UK freelancers can now submit their tax return directly from these tools as part of HMRC's Making Tax Digital initiative.

Get paid on time

Late payments are a frequent issue for freelancers – and they can have a serious impact on your cash flow.

To avoid problems:

• use clear, professional invoices with due dates

• send invoices promptly after work is delivered

• set payment terms in your contract (for example, 50% upfront, 50% on completion)

• use invoice software with automated reminders

• don't be afraid to chase – you're running a business

You can also charge statutory late payment interest (8% plus the Bank of England base rate), though many freelancers avoid this unless the issue becomes serious.

Understand and plan for tax

We covered Self Assessment in section 5, but here's a quick recap of key financial planning tips:

• Income tax

  • What you pay: 20% on earnings above £12,570 (basic rate)

  • When you pay: 31 January each year

• National Insurance

  • What you pay: Class 2 and Class 4 based on profit level

  • When you pay: 31 January (plus payments on account, if required)

• VAT

  • What you pay: If turnover exceeds £90,000

  • When you pay: Every quarter of the year, if registered

Tip: Set aside 25% to 30% of your income in a separate savings account to cover tax and National Insurance. Many freelancers do this as soon as they get paid to avoid the January panic.

Consider your pension

Freelancers don't get auto-enrolled into a workplace pension, so you'll need to set up your own.

Starting early – even with small contributions – makes a big difference over time. Here are your pension options:

• Personal pension with providers like Nest, Penfold or PensionBee

• SIPPs (Self-Invested Personal Pensions) via platforms like AJ Bell or Hargreaves Lansdown

You may also benefit from tax relief on pension contributions, reducing your overall income tax bill.

10. Growing your freelance business

Once your freelance business is up and running, the next challenge is growth – and that doesn't necessarily mean working longer hours or taking on more clients.

Growth can mean increasing your income, building a stronger brand, creating more stability or expanding into new areas.

The best growth strategies are sustainable, intentional and in line with your goals – whether that's earning more, working less or eventually building something bigger than yourself.

Raise your rates – when the time is right

As your experience and portfolio grow, so should your prices. If you're consistently delivering results, working with clients who trust you or have more demand than availability – it's a clear sign it's time to raise your rates.

You don't need to double your fees overnight. Start by:

• increasing rates for new clients

• switching hourly pricing to project or value-based pricing

• reviewing your rates every six to 12 months

When increasing your prices for existing clients, give notice in advance and highlight the added value or improved service they'll receive.

Expand your services or specialise further

As you grow, you'll discover more about what clients need – and where your strengths lie. That opens up two paths:

• Diversify your services – for example, a copywriter offering content strategy or a web designer offering ongoing maintenance packages.

• Niche down even further – positioning yourself as the go-to expert in a very specific area (for example, social media ads for ethical e-commerce brands).

Both approaches are valid. The key is to follow the demand, your skillset and what feels most energising to you.

Build long-term relationships with clients

Instead of always chasing new projects, focus on creating longer-term engagements:

• Offer retainer packages for ongoing support.

• Set up project roadmaps that lead to follow-up work.

• Proactively suggest new ideas or improvements to existing clients.

Long-term clients mean more predictable income, deeper working relationships and less time spent on sales.

Steve Folland, through his Being Freelance platform, has spoken often about the value of nurturing relationships.

For him – and many freelancers – growth isn't always about scale, but about stability, reputation and doing more of the work you enjoy with people you trust.

Delegate and outsource

If admin, bookkeeping or design work is draining your time or energy, consider outsourcing some tasks.

You don't need to hire employees – a fellow freelancer or virtual assistant can handle specific areas like:

• invoicing and finance

• scheduling your social media content

• maintaining your website

• transcription or editing

This frees up your time for higher-value work and helps prevent burnout – a key risk as your business gets busier.

Invest in your brand and marketing

When your core freelance operations are running smoothly, it's worth reinvesting some of your income into:

• a professionally designed website or portfolio

• better branding and copywriting

• paid ads (for example, Google Ads or LinkedIn ads)

• a coach, mentor or mastermind group

Angela Lyons used Google Digital Garage to sharpen her marketing skills and develop a more visible online presence – helping her grow through SEO and content, rather than relying solely on referrals.

This kind of strategic investment often pays for itself in better clients, more trust and stronger positioning in your niche.

Keep learning and evolving

Freelancing is a moving target – industries change, platforms update, clients' needs shift.

Staying curious and committed to professional development helps you stay competitive and confident.

Here are some ways to continue growing:

• Attend workshops, webinars or conferences.

• Take short online courses in your niche or tools (for example, Canva, SEO, video editing).

• Read books or listen to podcasts (for example, Being Freelance).

• Join accountability groups or freelance communities.

Growth doesn't always mean working harder – sometimes it's a case of working smarter, charging more and spending your time where it matters most.

Conclusion: Your freelance business, your way

Starting a freelance business in the UK takes courage – and a bit of admin. But with the right foundations, support and mindset, it can also be one of the most rewarding ways to earn a living on your own terms.

Whether you're doing this full-time, alongside a job or as a stepping stone to something bigger, remember:

• you don't need to have everything figured out on day one

• progress comes from taking consistent, imperfect action

• your business will grow and evolve – and so will you

The freelancers you read about in this guide – like Angela, Claudine and Steve – didn't start with polished brands or six-month pipelines. They started with an idea, took the first step and built from there.

So, if you've been asking "How do I start a freelance business?", the answer is: like this – step by step, decision by decision, supported by the right guidance. And now you've got that guidance.

Next steps

• ✅ Bookmark this guide and revisit it as you grow

• ✅ Download a freelance business checklist or template from the internet

• ✅ Join a community like Enterprise Nation or Being Freelance

• ✅ Register with HMRC if you haven't already

• ✅ Reach out to your network and pitch your first offer

Your freelance journey starts now – and the first client, first invoice or first "yes" might be just around the corner.

Get support with starting your successful freelance business

Visit the StartUp UK hub for resources that give you the education and inspiration to launch a successful freelancing business.