Stepping into the world of freelancing can be a life-changing move, especially if you’re an immigrant in the UK. As a freelancer, you can choose your clients, manage your schedule, and increase your earning potential. But, before you begin your freelancing journey in the UK, it’s useful to know the legal, financial, and practical steps to follow to get set up correctly.
Remitly focuses on supporting immigrants and expatriates by simplifying international finances. We understand the unique challenges of starting a new life in a different country, including navigating your self-employed journey. In this article, we’ll explain the processes of choosing a business structure, registering with HMRC, and finding freelance opportunities, so your transition can be a little simpler.
What’s it like to be a freelancer in the UK?
Understanding freelancing and its benefits
Many people opt for freelance work for its freedom and flexibility. You can be your own boss, pick your projects, and decide whether you want to work part-time or full-time, or take on short-term versus long-term projects. If you’re an immigrant, freelancing can be a great way to break into the local market, gain new clients, and build a diverse portfolio.
Key benefits include:
- Flexibility: Choose your working hours and the amount of work you take on.
- Variety of work: Take on different types of freelance jobs, from copywriting and graphic design to consulting and IT services.
- Growth potential: With the right strategy, you can earn much more than in some traditional roles.
If you’re new to living in the UK, you might want to check out How to Open a Bank Account in the UK as an Expat. A dedicated bank account is often the first step to smooth payments.
Popular freelancing fields in the UK
In the UK, you can make the most of a wide range of freelance sectors. Most popular sectors are continuously expanding, and newer ones are attracting attention from local and global businesses. These include:
- Creative services: graphic design, copywriting, video editing, illustration
- IT and tech: web development, data analysis, software engineering
- Marketing: social media management, PR, content creation
- Admin: virtual assistants, project management
- Tutoring and teaching: online language tutoring, exam preparation, vocational courses
You’ll find options across the whole of the UK. If you’re not sure yet where you want to settle, check out our blog on the Top 7 Cities in the UK for American Expats.
Skills assessment and development
Before you start offering your services, evaluate your strengths and weaknesses, as well as market demand for your skills. Ask yourself:
- Which skills do I excel at (e.g., coding, design, writing)?
- Which skills do I need to improve?
- Does my chosen market have enough potential clients?
Online platforms like Upwork and Peopleperhour can help you gauge demand. You can see the freelance jobs clients post. It includes the hourly rates and fees they’re willing to pay. By observing these listings, you can identify where your abilities might stand out, and if you need to invest in more training.
If you’d like more tips on thriving in the UK as an immigrant, read our guide on How to Settle in the UK.
Legal requirements for freelancing in the UK
Am I allowed to freelance in the UK as an immigrant?
This is the most important question you’re likely thinking of: can you even freelance in the UK as an immigrant? The short answer is, it depends on your immigration status. You’ll need to check the conditions of your visa or residence permit to see if freelance work is permitted. Some visas allow limited hours of self-employment, while others restrict it altogether.
If you’re unsure, always verify your visa conditions on the official GOV.UK website. This way, you can ensure that you comply with the law and avoid issues related to overstaying or working without the correct status. You can also find details on the different visa options here: How to Get a Work Visa in the U.K.: Your Options Explained.
Registering with HMRC and paying taxes
Once you’ve checked that your visa allows you to launch your freelance journey, the next essential step is registering with HMRC, the UK’s tax authority. Registration keeps your details on file for tax purposes, like income tax and National Insurance contributions.
Once registered, you need to file your self-assessment tax return each year. Include all taxable profits from your business. For more details on taxes as an immigrant in the UK, check out our blog post on Tax Deductions for Immigrants in the UK.
Choosing a business structure: sole trader vs limited company
Your business structure will determine how you’re taxed and how much personal liability you have. Being a sole trader often suits freelancers. But, a limited company can be better if you want to scale up or separate personal and business finances.
- Sole trader: Operating as a sole trader is the simplest route. You’ll need to file a self-assessment tax return every tax year and pay the appropriate tax and National Insurance rates. It’s easy to register and involves less paperwork, but you’re personally liable for debts.
- Limited company: You’ll need to incorporate your company, file annual accounts, and pay tax on your profits. This option offers certain liability protections, but it also requires corporate filings and stricter accounting rules.
For more on forming a limited company, check the official Companies House guidance. It outlines the step-by-step process, including the necessary documents and fees.
Setting up your freelance business
Writing a freelancer business plan
As a freelancer, it’s beneficial to establish a business plan from the beginning. This helps you define your goals, target market, and potential revenue streams. It doesn’t have to be lengthy or complicated, but it should outline:
- Services you’ll offer
- Pricing or invoice strategy (e.g., hourly or fixed fee)
- Marketing channels, such as website, social media or LinkedIn
- Projected income and expenses
Writing out your plan will help you clarify your strategy and decide whether a limited company arrangement or operating as a sole trader better fits your future vision. It’s a cornerstone document that keeps you focused, especially in the early stages of your freelance business.
Opening a separate bank account
Even if you choose to be a sole trader, it’s wise to maintain a dedicated bank account for your freelance finances. This separation simplifies your bookkeeping. It makes it easier to track your business income, expenses, and any invoice payments you receive.
Banks in the UK often offer business accounts tailored to freelancers and small enterprises. Take time to compare options carefully, looking at monthly fees, transaction costs, and any perks like invoicing tools. If you want to know more about setting up finances in the UK, read 4 Best Banks for Non-Residents in the UK.
Getting insurance for your freelance work
Insurance requirements often depend on the nature of your work. Two common types of coverage are:
- Public liability insurance: This protects against claims for accidents or injuries related to your business.
- Professional indemnity insurance: This covers legal costs and damages if a client claims that your services or advice caused them a financial loss.
It may be wise to consider the employer’s liability coverage if you hire others. You might also need specialised policies for creative or technical fields. Always read your insurer’s Privacy Policy to understand how your data is stored and used.
Finding work and clients as a freelancer
Creating an online presence
Nowadays, digital marketing is part of the skeleton of any business, big or small, in the UK. This means creating an online presence for your product or services. Your portfolio is often the first impression you give to new clients. Whether you build a personal website or use freelance platforms, make sure you highlight your best work.
- Include testimonials or case studies.
- Keep it visually engaging if you do creative projects like graphic design.
- Optimise your profiles for keywords relevant to your freelancing niche.
Another key part of creating an online presence is social networks. Channels such as LinkedIn and Instagram are invaluable for professional networking. Share updates about your recent projects, showcase your services, become an authority in your field, connect with other freelancers and potential collaborators, and participate in industry-specific groups. In the UK, the use of social media marketing for businesses is well-established and expected by potential clients.
Networking and building connections
Success as a freelancer often depends on forging long-lasting professional relationships. As you start to establish yourself as a freelancer in the UK, you’ll find that networking is common and encouraged.
Nowadays, there are many ways to connect both locally and globally. You can take part in virtual meet-ups, conferences, and workshops from the comfort of your home. And even in the smallest UK towns, you’ll find chances to join the local community. You can meet other freelancers and potential clients face-to-face. Different opportunities to network and build connections include:
- Joining industry groups on social media
- Participating in forums related to your skill set
- Offering free or discounted services initially to build a strong client roster
For more information about adapting to the local community and culture, check out this Remitly blog post on How to Settle in the UK as an Immigrant.
Setting your rates and invoicing clients
Figuring out how much to charge can be tricky. Many freelancers look at industry standards within the UK, the complexity of a project, or the value they provide. Regardless, be transparent and consistent. Here are some elements you’ll need to consider when planning your pricing strategy:
- Hourly vs. project-based: Decide whether you’ll charge by the hour or per project.
- Value-added services: If you offer extras, like additional revisions or a quicker turnaround, factor this into your pricing.
- Value-added tax (VAT): If your income crosses the threshold, you may also be required to register for VAT (Value-Added Tax). Check the HMRC website for the current threshold.
When invoicing clients, remember that each invoice needs to include your contact details, payment terms, and, if applicable, late fee policies. Accounting software or online tools can help streamline the invoice process.
Managing your freelance career
Balancing work and personal life
When you’re self-employed, the lines between your personal and professional life can blur. It’s easy to end up working evenings and weekends, especially when juggling multiple freelance jobs. To maintain a healthy balance:
- Set clear working hours and communicate them to new clients.
- Schedule regular breaks and time off.
- Learn to say no if projects exceed your capacity.
While it may seem counterintuitive at first, prioritising your well-being boosts productivity and growth in your freelance career in the long run.
Solutions for common freelancing challenges
Freelancing comes with its own particular set of challenges, like late payments, finding regular work, and dealing with tough clients. Here are a few solutions:
- Set payment milestones: Instead of waiting for one lump sum, ask for partial payments as the project progresses.
- Use contracts: Clearly define your scope of work, deadlines, and payment terms.
- Invest in professional services: An accountant can help with self-assessment tax returns. A lawyer can review your contracts if needed.
Continuing professional development
The UK market evolves quickly, so staying up to date with skills is crucial. Attend webinars, take online short courses, or earn certifications that boost your credibility. Ongoing training may help you justify higher rates. It is especially true if you become certified in sought-after technologies or methods.
Staying current helps you stand out to potential clients. It also keeps you competitive in a changing environment. This includes new software tools, emerging trends, and best practices.
FAQs
Here are answers to common questions about freelancing in the UK. If have any concerns about legal or financial matters, please talk to an accountant or seek professional advice.
How do I start freelancing in the UK?
- First, check that your visa or residence status allows you to do freelance or self-employment.
- Decide whether you would like to operate as a sole trader or set up a limited company.
- Register with HMRC to manage your tax and National Insurance.
- If possible, set up a separate bank account, and secure the necessary insurance.
- Create a strong portfolio and begin marketing your services to potential clients.
Do I pay tax on freelance work in the UK?
Yes, you will pay income tax whether you’re a sole trader or running a limited company. If you exceed the VAT registration threshold, you may owe VAT too. As a self-employed individual, you need to file an annual tax return and pay National Insurance contributions. For more details, check the HMRC website.
How to pay yourself as a freelancer in the UK?
As a sole trader, you can withdraw any profits you make after tax and expenses. You won’t pay yourself a formal salary; instead, you take “drawings” from your business finances. If you run a limited company, you can choose to pay yourself a salary through PAYE and/or dividends, depending on the company’s profit.
Does a freelancer need a business license in the UK?
Generally, there’s no need for a specific freelancer license. Just make sure you’re registered correctly for tax purposes. Some regulated professions, like lawyers and financial advisors, may need extra licenses or certifications.
Can I freelance in the UK as an American person?
This depends on your visa or immigration status. Some visa categories allow freelance work, while others do not. Always check the specific conditions attached to your visa or seek legal advice if you’re unsure.
Can you work in the UK as a freelancer?
Yes, if your visa or immigration status allows self-employment. UK citizens, permanent residents, and those with self-employment visas typically face no issues. However, students or those on other restricted visas may need special permission.
Do freelancers need a contract in the UK?
It’s highly recommended. A contract outlines the scope of the project, payment terms, and timelines. This protects you and your client. If any disputes arise, a contract serves as the first reference point for resolution.
Can I do freelance work while studying in the UK?
If you’re on a student visa, there are usually strict limits on your ability to work or be self-employed. Most student visas do not permit self-employment. Check the official GOV.UK guidance or speak to your university’s international office to confirm what you can do.
