The world of freelancing can be both exciting and daunting, especially during economic crisis. But, with the right knowledge and resources, you can set yourself up for success as a freelancer in the UK. Whether you’re a recent graduate looking to gain experience, a parent wanting flexibility, or someone looking to take the leap into self-employment, this guide will provide you with the information you need to get started.
The freelance economy in the UK is booming, with the number of self-employed individuals increasing by 4% in 2019, according to the Office for National Statistics. Freelancing offers the freedom and flexibility to work on your own terms, but it also comes with its own set of challenges. One of them being the economic crisis, which can make it harder to find steady work and secure clients. However, with the right mindset and approach, you can navigate these challenges and set yourself up for success as a freelancer.
4 steps to set up your freelance business in the uk
#1 Registering as self-employed
The first step in setting up as a freelancer in the UK is registering as self-employed with HMRC. This is a legal requirement for anyone who is working for themselves and earning more than £1,000 a year. To register, you will need to provide your personal details, such as your name and address, as well as information about your business, like your business name and what you do.
You can register as self-employed online through the HMRC website. It’s important to note that there are deadlines for registering, and failure to do so can result in penalties. It’s best to register as soon as you start freelancing to avoid any issues later on.
#2 Understanding taxes and National Insurance contributions
As a freelancer, you are responsible for paying your own taxes and National Insurance contributions. This can be a confusing and overwhelming process, but it’s important to understand how it works to avoid any complications down the line.
When you register as self-employed, you will be classified as a sole trader. This means that you will need to complete a self-assessment tax return every year and pay income tax on your earnings. You will also need to pay Class 2 National Insurance contributions, which are currently £3.05 per week, and Class 4 National Insurance contributions, which are based on your profits.
Another option for freelancers is registering as a limited company. This can offer certain tax benefits but it does involve more paperwork and administration. It’s best to consult with an accountant or a tax advisor to understand which option is best for you.
#3 Setting up a business bank account for your freelance business
It’s essential to separate your personal and business finances as a freelancer. One way to do this is by setting up a business bank account. This will make it easier to keep track of your income and expenses, and it will also give you a more professional image when dealing with clients.
When choosing a business bank account, you should consider the fees, interest rates, and other features that are important to you and your business. You will need to provide personal identification, such as a passport or driving license, and proof of address, such as a utility bill, to open an account.
#4 Finding freelancer work
One of the biggest challenges of freelancing is finding work. This can be especially difficult during an economic crisis when businesses are cutting back on their expenses. However, with the right approach and tools, you can increase your chances of finding steady work.
One important aspect of finding work is creating a compelling portfolio. A portfolio is a collection of your best work and it’s a great way to showcase your skills and experience to potential clients. It should be visually appealing, easy to navigate, and highlight your strengths. Some common types of work to include in your portfolio are: previous projects you’ve worked on, testimonials from clients, and case studies.
Marketing strategies for freelancers
Once you have a portfolio, it’s time to start promoting yourself and your business. Marketing is essential for freelancers, as it helps you attract new clients and grow your business. Some effective marketing strategies for freelancers include:
- Building a website: A website is a great way to showcase your portfolio and provide potential clients with more information about your services.
- Networking: Joining professional associations, attending industry events, and participating in online communities is a great way to connect with other professionals and potential clients.
- Social media: Platforms like LinkedIn and Twitter can be used to share your expertise and connect with potential clients.
- Content marketing: Blogging and creating valuable content can help position you as an expert in your field and attract potential clients.
The benefits of joining professional associations as a freelancer
Joining professional associations can provide many benefits for freelancers. It can give you access to a network of like-minded individuals, resources and information, and professional development opportunities. Additionally, it can give you a sense of community and support, which can be especially valuable during difficult times such as economic crisis. Some examples of professional associations for freelancers in the UK include: The Freelancer Club, IPSE (Association of Independent Professionals and the Self-Employed) and Professional Freelancers and Self-Employers.
Final thoughts
Setting up as a freelancer in the UK can be challenging, especially during economic crisis, but with the right knowledge and resources, you can navigate the process and set yourself up for success. By registering as self-employed, understanding taxes and National Insurance contributions, setting up a business bank account, creating a compelling portfolio, and marketing your business effectively, you can increase your chances of finding steady work. Additionally, joining professional associations can provide you with a sense of community and support. Remember, freelancing is not for everyone, but it can be a rewarding and fulfilling career choice.
To help you get started, here are some additional resources for freelancers in the UK:
- HMRC website: https://www.gov.uk/government/organisations/hm-revenue-customs
- The Freelancer Club: https://thefreelancerclub.co.uk/
- IPSE: https://www.ipse.co.uk/
- Professional Freelancers and Self-Employers: https://www.pfse.org.uk/
Take action today and start setting up your own freelance business!
