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Join for freePosted: Thu 17th Sep 2026
Freelancing or running your own small business offers freedom, but managing your own taxes can feel daunting.
This session, led by Chantelle Clarke, cuts through the jargon to explain how self-assessment works, ways you can potentially lower your tax bill by claiming allowable expenses, and how to sidestep the surprise costs that catch people off guard.
Whether you're just starting out or already going it alone, you'll walk away ready to take charge of your money with confidence.
Learn how self-assessment works and how to file with HMRC without the stress
Discover allowable expenses and allowances that may shrink your tax bill
Get ahead of payments that can catch freelancers off guard
Chantelle joined FLIC as head of content after 12 years teaching and leading humanities departments in inner-city London secondary schools.
Her skill set extends to identifying both organisational and individual learning needs, helping others build a culture that positively impacts outcomes for adult and young learners alike.
Chantelle has extensive experience creating content for a range of audiences; she is a self-published author and host of the podcast Black Women Working.
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Lightly edited for clarity.
Ryan: Good afternoon, everyone, and welcome to today's Lunch and Learn. My name is Ryan, and I'll be your host today.
For those of you attending Lunch and Learn for the first time, Enterprise Nation is a vibrant community platform for startups and small businesses. Today, I'm really pleased to introduce the brilliant Chantelle Clarke and Adi from FLIC.
In this session, Chantelle will cut through the jargon to explain how self-assessment works, ways you can potentially lower your tax bill by claiming allowable expenses, and how to sidestep the surprise costs that catch people off guard.
As always, if you've got questions, post them in the chat, and we'll do our best to answer them at the end. The webinar is recorded, and a follow-up email with the recording and further resources will go out later, so keep an eye out for that.
So on that note, I will hand over to you, Chantelle.
Chantelle: Thank you, Ryan. Good afternoon, everybody, and thank you for taking the time to be with us today.
Just take a moment to yourself to think about your finances – not always easy to do, but definitely very important. In today's session, we will be talking about finance for freelancers.
Just by way of a short introduction, I am head of content for FLIC. FLIC is the Financial Literacy and Inclusion Campaign, a charity set up by the Financial Times.
Our mission is to ensure that financial literacy education reaches those who need it the most. We do that by supporting young learners and adult learners in various capacities.
Today, we are introducing you to our video library. FLIC has worked tirelessly over the last two years to build content around eight core modules of adult learning, covering topics such as budgeting, earning, finance for freelancers, pensions, managing debt, credit options, investment, and mortgages.
So much of what you'll see today can be expanded on in our learning hub. These eight modules comprise bite-sized videos, which typically are built around your key questions.
For example, if you're in the pensions module, it might be that you just want to know: is the state pension enough? There's a two- to five-minute video that answers those questions, so you can watch an entire module or just exactly what you're looking for.
So today, we want to introduce you to our offering and information around finance for freelancers. We won't be able to tackle the entire module, which has about eight videos and half an hour's worth of learning in total, but we will capture some key areas today.
Now, it's always good to know that we're hitting the mark and meeting our beneficiaries where they're at. So I will give you just a moment, if you can, to use the chat to let us know what information you are looking for.
What are the key questions that you have around your finances as a freelancer? Feel free to use the chat – drop your questions and concerns.
[Pause while attendees respond in the chat]
I am going to go quiet just to give people a moment to type. I'll give you another 30 seconds, but thank you for the contribution so far.
So, looking at the basics of good record-keeping: when you should consider whether or not you're choosing to be a limited company versus a sole trader, and what are allowable expenses as a freelancer – all common areas and questions that we get asked. What is even considered an expense?
Thank you to those of you who have been able to pop some of your thoughts in the chat. It's good for us to know we're on the mark. If you're still typing, that's fine, but I will move on because our time is short and sweet.
The entire module for finance for freelancers definitely does answer these questions, even if I'm not able to in our time together today. So there are eight videos.
We start off with, well, why are you in freelance? What's the benefit of being a freelancer? How does freelancing compare to traditional employment in terms of your rights?
Setting up your business – so the question from, I believe, Monique, on whether or not it should be a limited company or sole trader: video three is probably going to be really good for you, because it breaks down the difference between these two entities.
Budgeting for your business – so questions around tracking your expenses and keeping good records: video four is good for that.
Today, we are going to take a step back in terms of just being prepared for the operation of your business, and we are going to look at calculating your rates.
I'm not sure who's new to freelancing in the room or who is very experienced, but with changing economies and changing costs, it's always good to reflect and recap on: am I setting the appropriate rates that I need?
We have a video on building your client base, with some ideas around what you can do to ensure that you're maximising your marketing. There's also great information on invoicing and managing late payments – what you can do legally, and how to calculate those.
And we will look today at taxes: how you can prepare for your self-assessment, and expenses. I know there were a few questions on what's classified, so the content will cover that.
So we're in the right place, and I've definitely got some answers – and if I haven't got all of them, you'll have used this opportunity to think through the questions you had and the answers you've got.
It just makes any time that you're seeking out additional support elsewhere, that you're really clear on what information you're looking for. So do keep your notepad, or notes in your phone, to hand, to make sure that you are recording not just what's useful, but the key questions you might still need to seek answers for.
The idea of these videos, as I've said, is that they are short. They give you the information in the clearest, jargon-free way, and allow you to identify any key actions you may need to take, with some signposting to where best to get that help.
Any signposting that isn't in the videos, you'll be able to find on our learning hub as well.
So let's get into it: calculating your rates. I think one of the biggest shortfalls we come across with freelancers is: have I even allocated enough money coming in to not just cover the running of my business in terms of the service I provide, but also the back end – the taxes, and so on?
That comes from the starting point of calculating your rates accordingly. So let's have a look at what's to be learned here. Please play.
[Video plays]
Putting a price on your work can feel tricky. You want to attract business, and it's very common to worry that charging too much will put off potential clients.
But remember, your freelance income doesn't just keep the business going – it also has to cover your personal living costs like rent, food, bills, and everything else you need day to day.
Because freelance income can go up and down, it's a good idea to build in a buffer for quieter periods, so you're not caught short if work slows down. One way of charging is to use a day rate.
A day rate means you set a fixed price for each day you work. To figure this out, start by deciding how much you'd like to earn over the year, then add on around 30%.
This covers things you don't get when self-employed, like holiday pay, sick pay, pension contributions, and other benefits employees usually receive. Once you've got that number, divide it by the number of days you expect to work.
A common benchmark is around 220 working days a year, which works out at about nine days every two weeks. That allows for roughly 40 weekdays off during the year.
Charging a day rate can make things much easier. One of the biggest benefits is that it's very simple – you set one price per day of your time, and that's exactly it.
Clients know exactly what they're paying for, and you know what you earn. It also makes your income more predictable: if you know roughly how many days you'll be working in a month, you can work out what money you've got coming in, which can help with planning your bills and other costs.
Another benefit is that clients often find day rates easier to compare. They can quickly see your price alongside someone else's, which can make you easier to hire.
The important thing to remember about day rates is that your payment is based on the days you work – if you're not working, you're not earning. Clients are also more likely to see your fee as payment for your time rather than for your skills and expertise.
And, of course, if you work in an industry like weddings, you might have a lot of work in the summer but much less in the winter. Your rate needs to reflect these ups and downs, and also allow for flexibility if you need to pay for extra help during busy times.
Another option is to use a project rate. A project rate means you agree on a price for the whole job no matter how many hours or days it takes.
This can work really well because it shifts the focus from the time you spend to the value you deliver. Clients often like knowing exactly what the total cost will be up front.
And if you're skilled and efficient, project pricing can reward you for working quickly rather than making you feel like you're losing out if you finish sooner. The drawback is that if the work takes longer than expected, you might find yourself doing more hours for the same money.
It's also harder to get the right price when you're starting out, because it takes experience to know how long different jobs will really take.
There are also other ways of charging. For very short or one-off jobs, charging by the hour may be more transparent and fair.
Or, if you work with the same client regularly, you might agree on a fixed monthly fee for a set amount of work – this is called a retainer, and it can give you more stability with your income.
Whichever method you choose, remember to put aside money for tax. It's sensible to save around 25 to 30% of what you earn, so you're ready when your tax bill comes.
Finally, once you've set your rate, it can feel uncomfortable to raise it with existing clients, but as your costs go up and your skills improve, it's perfectly reasonable to review your prices and make changes when needed.
[Video ends]
So calculating your rates, as I've said, is just a helpful reminder that there's more than one way you can consider how you charge for the services – or products – that you provide.
The key points to draw from that video are that freelancer income has to cover more than your business, that there are different pricing models which suit different situations, and that your pricing has to account for this hidden cost.
We make this point, and we've drawn this video out for this session, because it can feel really uncomfortable, especially when you are trying to be appealing to your clients and also competitive within the market. But what you can't afford to do is cut yourself short and then not have all of your personal and business expenses accounted for.
In sessions when we've delivered this, people often say they never really thought about adding that 30%, or about what this looks like in the landscape of their work in terms of how many days they intend to work.
Or planning for those lean periods when work doesn't come in – we do have videos in our budgeting module on lean periods, and then on accounting for extracting that 25% to deal with that big old baddie: the small word, tax.
So some actions to consider: have a look at your pricing and calculate what your day rate is, and look at the market – how does this compare?
Review whether your pricing methods match the clients you're dealing with and the services you're offering. Think about your rate card: if someone asks for a specific piece of work, do you have your hourly cost, your day rate, and perhaps a project rate, so you know the margins within which you're operating?
That then allows you to understand what negotiation looks like when someone is trying to price you down, and helps you feel confident in standing your ground on the price you're setting. Within that, it allows you to build in your financial safeguards.
Do feel free to use the chat to pop in any questions, suggestions, or notes you're making – we will have time at the end to come back to them. I just want to make sure we get through the content rather than going into questions at this stage, but please do note them down.
So the one we all kind of shy away from, get scared of, and which perhaps even stops us from taking our business to the heights it should be: worrying about tax.
This video is a little longer, but there is some really good information in it. It's available for you to access independently, in your own time, for free again, so anything you miss, don't worry – you can come back to it in your own time.
[Video plays]
Freelancing gives you freedom. It also means you're in charge of your own taxes.
Don't worry if this feels overwhelming – this video will explain the basics in simple steps so you can stay on track.
When you're self-employed, tax isn't deducted from your pay automatically. Instead, you need to report what you earn and pay the correct amount to HMRC – that's the UK's tax authority.
You would do this each year through something called a self-assessment tax return. This is a form usually completed online, where you tell HMRC what you earned and what expenses you can claim, and HMRC then calculates how much tax you owe.
You don't pay tax on everything you earn: in fact, if you only earn a small amount from self-employment, for example through a side hustle, you can use a trading allowance.
This is a tax exemption that allows individuals to earn a certain amount per tax year from trading or miscellaneous income, without having to declare it to HMRC or pay tax on it. You want to keep careful track of your earnings and expenses when you work for yourself.
If you earn more than the trading allowance, you can subtract the cost of running your business – called allowable expenses. You're entitled to claim certain expenses as deductions against your income if you are self-employed and you submit a tax return.
When it comes to deductible expenses, there are quite a few categories to keep in mind. First, office costs – things like stationery, phone bills, and other essentials.
Then work-related travel expenses, such as fuel, parking, or train and bus fares. Clothing can also count, but only if it's necessary for your work, like uniforms.
Staff costs are another category, including wages or subcontractor fees. You can also deduct certain financial costs, such as insurance or bank charges.
Don't forget about the cost of your business premises, like heating, lighting, and business rates. Advertising and marketing expenses are deductible too – for example, the cost of running a website.
And finally, training courses directly related to your business can be included as well.
All of these fall under allowable expenses, helping you reduce your tax bill. Calculating your tax-deductible expenses provides immediate tax relief by reducing the profit you're actually taxed on.
You can find out more on the government's website for freelancers.
In the UK, every working adult has a personal allowance – this is an amount you can earn tax-free. After that, you pay an increasing proportion, typically 20, 40, or 45%, depending on your income level.
While these are the standard rates, they do vary slightly if you are a taxpayer in Scotland, as you can see from this comparison on screen.
Freelancers also pay National Insurance to qualify for benefits like the state pension. There are two types: class two, which is a low flat weekly rate, and class four, which is a percentage of your profits.
So what does filing your self-assessment involve?
You must send a tax return if, in the last tax year, you earned more than a certain amount, before taking off anything you can claim tax relief on.
Register as self-employed with HMRC.
Get your unique taxpayer reference, or UTR, by post.
For most people starting out, you'll log in to HMRC's portal online.
Enter your total income for the year.
Enter your allowable expenses – things like laptops, travel, software, and marketing.
The system will then calculate exactly what you owe in tax and National Insurance.
Submit your return online by 31 January each year.
Now, a quick but important heads-up: if your earnings are above a certain level, a system called Making Tax Digital applies to you. Instead of using a standard portal once a year, you're required to use HMRC-approved software to keep digital records and send summaries of your income and expenses multiple times a year.
This is in addition to your final end-of-year declaration, which should also be submitted through your HMRC-approved software. Note that these thresholds will change in the future, so always check gov.uk for the latest.
Pay your tax bill, either in full or through a payment plan – most people pay in two instalments during the year, but this depends on your specific circumstances.
Stay organised. It's worth setting up digital calendar reminders and signing up for HMRC's email alerts – you'll receive a fine if you submit your tax return late.
When you submit your first self assessment, HMRC will likely ask for payments on account. These are advance payments towards your next tax bill, due every January and July.
This often catches new freelancers off guard, because it can significantly increase your first-ever payment, so it's wise to set aside extra cash from day one.
For self-employed individuals, there is a mandatory limit at which you must register for VAT, which stands for value-added tax. If your taxable turnover exceeds this amount in any rolling 12-month period, not just the tax year, you must register.
If you expect to exceed it within the next 30 days, you can also register in advance. Your taxable turnover includes all sales of goods and services that are not exempt from VAT.
You can choose to register for VAT even if your turnover is below the limit – this could be beneficial if you often buy goods and services from other VAT-registered businesses, as you can then reclaim the VAT you paid.
HMRC offers lots of free help: guides, videos, live webinars, and a self-assessment helpline. You can also set up a payment plan online if you can't pay your bill all at once.
Freelancing gives you independence, but it also means taking charge of your own tax. Keep good records, set aside money regularly, and use the support available – that way, tax doesn't have to be stressful.
[Video ends]
It doesn't give you all the answers, but I do feel the video does make clear some key headlines to be aware of, to guide you through your next steps.
So, key points: obviously, as we know, being self-employed, tax is self-managed. There are allowable expenses that allow you to reduce your tax bill.
It doesn't mean that you haven't paid for that thing up front, and it doesn't mean that it's for free, but once you count it as one of your expenses, it reduces what is considered the profit your business has made, and what you are taxed on.
Tax obligations, as you saw, are scaled in line with your earnings – so it is not everything you earn as a freelancer that you are taxed on, just like if you were employed.
Other key points that we haven't said, but I will reiterate, are the idea that you need to think about safeguarding for that bill and planning. I know there was a note of some questions on record-keeping.
I think most importantly – which isn't necessarily covered here – is to first and foremost register and get set up. Once you're set up, you have your gateway to be able to have these conversations with HMRC and Companies House about what you need to do.
I think it's so important that we don't bury our heads in the sand. The worst thing that could happen is you get that bill, you get that letter, and you're caught off guard.
It's better to make the time to make the phone call, ask the questions, and find out what you need to know, so you're ahead of the curve.
Keeping track of your expenses and earnings all year round, in the way that suits you – that might be your spreadsheet, or it might be that you're in a position to have an accountant working alongside you.
As much as you make time to do the client-facing work that you're doing, it is so important that you create time in your diary regularly for those business admin meetings.
I think it's the volume of the task, and the deadline, that often gets people. So that monthly meeting – this is my two-hour finance slot, where I am going to download all of my bank statements so they are in one place, and make sure all my receipts that I've stuffed into an envelope are filed.
Gradually, step by step, chipping away, so that you're not dealing with 12 to 18 months all at once. That regular meeting with yourself is one of the key things that will probably save you some of the stress when these deadlines come around.
Planning your cash flow around these deadlines: as we've said, that starts from the very outset of calculating your rates, and making sure that your rates do apportion to the tax you may have to pay.
The payments in advance – I think one thing that also gets people a bit tied up in knots is the fact that your tax is paid in advance. It's worth doing an activity where you look at the timeline from when your tax bill is payable.
The advance, which is usually in July, and then the bill that's in January – but also accounting for the fact that your tax bill is a year behind your business. So if you've started now, you've got the year to keep track and keep records, to be ready for the bills that are about to be paid.
Having a look at your own timeline of business is also important.
I'm glad that we've had this time together. It's the snapshot – someone has said it's very helpful, thank you for that feedback – but it's so short, so we don't have time to answer the wealth of questions.
But you've got your starting point, and you've got a lot of support from Nation, so I do hope that this has been helpful for you.
As I've said, you can Google FLIC Learning Hub, which will direct you to our other resources, or to rewatch the videos you've just seen.
There was a question in the chat around staying with a client who doesn't want to pay you. I guess my point to that – and I'm no expert in the field – is that it's about your decision.
It is a very personal decision, and your relationship with the client and whether or not you continue. That personal decision is based on the work you're doing, the finances you know you're managing, your worth, your self-worth, and how you feel.
It might be really practical, because there's currently no income, and that might be better than taking little to take the job. It might be that you decide to keep on that client who doesn't want to pay the full bill, because you're building credibility, depending on where you are on your journey.
But I think the relationship management is around the notice periods that you give. If you have long-standing clients, they understand that there will be an increase coming, and that they're ready for that.
It also might be around how you understand the nature of your business, and how you break down your costs. So if you're not able to fulfil an entire project with the budget they have, it's about being confident in maybe saying: I can do this component and this component, but anything outside that is outside your budget.
Those early conversations with your clients – what is your budget for this work? – help them to understand what their money can offer.
I always say, on a personal note, people decide whether they're choosing Prada or Primark. They have very different price points.
There are options in the market, and you know where you stand on the services you're delivering.
Ryan: Amazing, Chantelle, and you're just bang on time there. That was really helpful – it's really great feedback coming in there, very helpful. Great session.
We have the question from Richard, which was fantastic that you answered there. I think that was really helpful, Chantelle, and really, really interesting. I would recommend everyone watch that.
I've popped your LinkedIn in the chat, and I've also popped the link to the further resources – do go and check those out, because they're all so helpful. I think even in just those 30 minutes, we've learned a lot on the call.
Chantelle: And the good thing is, don't shy away. Just taking a moment, and even this short half hour, brings an element of clarity, or reduces the fear that we're kind of walking around with, without knowing what we need to do, or what we need to know.
Ryan: Yeah, amazing. Well, I think that's a great way to end, Chantelle. I think, big, big thank you.
Chantelle: Yeah, it's really nice to see all the feedback coming in.
Ryan: I think, as I mentioned to everyone earlier, a recording will go out later, so keep an eye out for that. Please do connect with Chantelle afterwards, and follow up with FLIC if you want to learn more and access the resources.
Yeah, huge thank you, Chantelle. Thank you to Adi as well – I know you're in the background; you've been supporting.
Chantelle: Thanks, Ryan.
Ryan: Yeah, and I think thank you, everyone, for joining, and a big thank you again. Take care, everybody.
See you all later. Enjoy the rest of your day. Bye bye.
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