Are you a UK worker interested in learning how to become a freelancer? In this article, we’ll guide you through the process.

The UK business arena has witnessed a noticeable shift towards freelancers and the gig economy, with a 31% rise in 2018, which took the figure to above 5 million. With figures for 2019 expected to show continued growth once they are revealed, it’s evident that the opportunities are at an all-time high. So, how can you join the workforce revolution?

Photo by Markus Spiske 

Before looking at the path on how to freelance, it’s imperative that you analyse the situation to confirm whether it is the right way to go. Becoming a freelancer appeals to graduates fresh out of uni, workers seeking a career change, and experienced individuals wishing to transition away from standard employment alike.

 

There are many attractive incentives for becoming a freelancer in the UK. Some of the most compelling reasons include;

 

• Start getting paid from doing something you love straight away?
• Avoid needing to work your way up the traditional ladder by doing junior office roles?
• Gain complete flexibility about when to work, where to work, and who to work with?
• Feel in control of your destination, embracing new ideas and strategies as you see fit?
• Remove the ceiling on potential earnings and revenue?

 

It is equally important to consider the potential downsides too. The main ones include the lack of stability, especially in the early months, as well the fact you’ll need to spend time learning to market your talents and handle admin that you wouldn’t experience in traditional employment.

 

Ultimately, freelancing in the UK isn’t for everyone. Anybody that is suited to this way of working, however, will find that there has never been a better time to start – especially as companies are increasingly aware of the benefits on offer.

Anybody that decides to become a freelancer must be prepared for a transitional phase. Depending on your stage of life and personal circumstances, the transition may pose a few obstacles. As such, knowing whether it’s best to go full-time or start as a part-time extracurricular activity is another key responsibility.

 

Losing the stability of a guaranteed set salary will affect your life in several ways. First and foremost, landlords and mortgage lenders find it harder to accept applications. When you factor in other living costs (food, transport, clothes, entertainment), quitting your current job to go full-time with the freelancing can place unnecessary pressure on your shoulders. Worse still, if you don’t see quick results, it may force you to give up your dreams prematurely.
 

For many, it’s better to start out freelancing as a side hustle. However, there are notable exceptions such as young adults still living at home without financial commitments or experienced professionals that already have a strong network of prospective clients.

 

There is no single correct path to take, except the one that works for you.

When starting your career as a freelancer, registering as a freelancer with HMRC is essential. The big question is whether to become a Sole Trader or a Limited Company. Sole traders are self-employed people that are considered wholly responsible for the finances of the business. Limited companies, however, are separate entities that have shareholders and directors – although it is still possible to run a company as a single person.

 

There are pros and cons for each pathway, including but not limited to;
 

• Sole Trader – Easy to set up and manage (Pro)
• Sole Trader – Retain privacy (Pro)
• Sole Trader – Held responsible for financial debts and liabilities (Con)
• Sole Trader – High tax rates for high-earners (Con)
• Limited Company – Protection over company name (Pro)
• Limited Company – Kinder tax rates and flexibility (Pro)
• Limited Company – Lots of admin and responsibilities (Con)
• Limited Company – Information public available via Companies House (Con)

When you become a freelancer, you’ll also need to register for tax payments with HMRC. Things can get a little complicated when you still have paid traditional employment. Get organised with your UTR (Unique Taxpayer Reference) and other key information. 
 

If you’re unsure, call HMRC for support. It’s better to get on top of the situation than be left facing problems after a few months.

Millions of people share a dream of making money from their passions while retaining control of their workloads. However, this vision remains little more than an idea until you are actively working as a freelancer. Every industry has its unique challenges and elements, but all new freelancers need to ask two main questions;

 

• Who will I work for?
• How much will I charge them?

 

Finding clients isn’t easy. You have to market your services, which could mean setting up an online portfolio or attending networking events. If you provide a consumer service such as hairdressing or dog walking, friends and relatives offer a good starting point. It’s a chance to build up your portfolio and experience while the ‘selling’ and communication should be a lot less daunting.
 

It’s important to be realistic about how much work you can take on, particularly if you still hold another job. Understanding this factor can guide you towards the right type of clients, reducing the time wasted chasing unsuitable leads. Sadly, if you take on contracts that you can’t complete to the highest standard, it will lead to unhappy clients and potential refunds.

 

Setting your fees is another crucial step to success. This can be done as a set fee, hourly rate, or day rate. It’s important to remember that clients will generally choose a service for one of two reasons; either they provide the best quality, or the best price. As such, market research into the going rates is an essential factor that will help you set competitive prices. 

 

While you will probably enter the lower end of the scale at the start, learning not to sell yourself short is equally vital. Otherwise, losses will drive your freelancing endeavours into the ground. Finally, you must protect your business activities with the right insurance plan. Professional indemnity insurance and business equipment insurance are two very common features, while many creatives also require public liability insurance coverage.
 

Putting the right foundation in place won’t guarantee success, but it will give you the best chance of turning your freelancing dream into a reality. Over five million UK workers are already doing it – and you can too!