Starting your freelance journey is exciting, but it can be overwhelming. There’s a lot to think about when it comes to how to set up as a freelancer, from legal stuff to managing your money and making sure you’re protected.

That’s why having a clear, step-by-step checklist is so handy.

How to set up as a freelancer in the UK

Whether you’re just thinking about how to set up as a freelancer or have already started, this checklist covers all the key things you need to do to set up properly in the UK.

Follow it to get organised, stay compliant, and build a solid foundation for your freelance business.

Ready? Let’s get started.

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1. Decide your freelance business structure

The first step is to decide between Sole Trader, Limited Company or Partnership.

For most situations Sole Trader set up is simplest for most starters. A Limited Company offers many benefits though, such as liability protection and tax advantages for higher earners. 

Your business structure affects your taxes, responsibilities, and paperwork—so pick what suits your situation now, knowing you can change later.

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2. Register your business with HMRC 

Sole Traders: 

Register as self-employed within 3 months of starting work.

Limited Companies: 

Register with Companies House and notify HMRC.

This tells HMRC you’re officially running a business and sets up your tax records. Don’t delay, penalties can apply for late registration.
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3. Open a business bank account

It’s important to keep your personal and business finances separate to stay organised and make accounting easier. If you’re setting up a Limited Company, having a dedicated business bank account is mandatory. 

We recommend checking out Zempler, a trusted partner that offers great features tailored specifically for freelancers and small businesses.
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4. Set up an accounting system

Use accounting software like Crunch to manage your invoices, payments, and expenses all in one place.

Keep digital copies of your receipts to stay organised and make filing your tax return hassle-free.

Good bookkeeping with Crunch not only makes tax time easier but also gives you clear insights into your profit and helps you spot opportunities to grow your freelance business.
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5. Understand your tax responsibilities

As a freelancer, you’ll need to register for Self Assessment and file a tax return each year. You must pay income tax and National Insurance Contributions (Class 2 and Class 4), and if your turnover goes above the VAT threshold (currently £90,000), you’ll need to register for VAT as well. 

It’s wise to set aside roughly 25-30% of your profits regularly to cover your tax bills, it’s better to be prepared than caught off guard.

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6. Get the right insurance

Protecting yourself with insurance is essential. Professional Indemnity Insurance will cover you if a client claims you made a mistake, while Public Liability Insurance covers injury or damage to others during your work. 

Depending on your field, you might also want income protection or equipment insurance. Many clients expect freelancers to have insurance, and it’s a key part of running a professional business.
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7. Set your rates and write contracts

Research what others in your industry charge so you can set fair and competitive rates that reflect your skills and experience. Always put agreements in writing. Contracts should clearly state the scope of work, payment terms, deadlines, and rights. 

You can find templates online or get professional advice for more complex projects. Clear contracts protect both you and your clients and help avoid misunderstandings.
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8. Create your brand and find clients

Building a simple website or portfolio is a great way to show off your work and attract clients. Use LinkedIn, freelancer platforms, and industry events to network and grow your connections. 

Don’t be shy about asking satisfied clients for referrals and testimonials—word of mouth is powerful when you’re starting out.
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9. Stay organised and keep learning

Freelancing is a journey, so it’s important to stay on top of deadlines with calendars or project management tools. 

Regularly reviewing your finances and business goals helps you stay focused and motivated. 

Keep improving your skills through online courses or by joining freelancer communities, this keeps your offering fresh and your motivation high.
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10. Protect your privacy and professional image

Try to keep your business communications separate from personal ones by using a dedicated email address and phone number where possible. If you're running a Limited Company, your registered office address will appear on public record. Instead of using your home address, consider a registered office service like Hoxton Mix. 

It’s included with Crunch Premium or available as an affordable add-on for Crunch Pro users. Hoxton Mix gives you a professional London address, mail scanning, and a secure online dashboard for viewing official correspondence from HMRC and Companies House. It’s a simple way to protect your privacy, look more professional, and stay organised.
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11. Back up your business data

Make sure you regularly back up all your important business records, including invoices, receipts, and expenses. Whether you store them in the cloud or on an external drive, having secure copies is essential. Especially when it comes to completing your Self Assessment. HMRC can ask for supporting evidence, and lost data could lead to avoidable stress or penalties. Keeping everything safely backed up means you’re always prepared.

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12. Understand IR35 (if you’re working with clients through a Limited Company)

If you’ve chosen to operate as a Limited Company and work with clients in a contractor-style setup, you may fall within IR35 rules. These determine whether you’re genuinely self-employed or essentially working as an employee in disguise.

Failing to comply can lead to unexpected tax bills, so it’s worth getting professional advice if this applies to your work. Crunch offers expert IR35 guidance and support to help you navigate this.
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13. Register for a pension or savings plan

Freelancers don’t get workplace pensions, but saving for your future is still vital. You can open a personal pension or Lifetime ISA, both of which offer tax relief or government bonuses.

Even small, regular contributions can add up over time—and they’re a good way to reinvest in your long-term financial stability.
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14. Plan for time off and emergencies

As a freelancer, no one pays you when you’re off sick or on holiday. That’s why it’s smart to factor downtime into your pricing and create a financial buffer or emergency fund.

Think about what happens if a client pays late or if you need to take a week off — planning ahead helps reduce stress later on.
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Common mistakes freelancers make (and how to dodge them)

No one gets everything right straight away. Here are a few easy-to-make slip-ups that can cause trouble if you're not careful:

• Not separating your finances
  It’s tempting to run everything through your personal account when you're just starting out, but it makes things messy later. A proper business account (like Zempler) keeps things clean and makes your life easier come tax time.
  
  
• Charging too little
  Most new freelancers undervalue themselves at first. Do some research and remember—you’re covering your own taxes, time off, and expenses now. Don’t sell yourself short.
  
  
• Forgetting to set aside tax money
  We’ve said it already, but it’s worth repeating: get into the habit of setting aside 25–30% of your income as you go. The last thing you want is a surprise tax bill and no way to pay it.
  
  
• Losing track of your paperwork
  Receipts, invoices, contracts—keep them backed up somewhere safe. You’ll thank yourself when Self Assessment season rolls around.
  
  
• Skipping insurance
  It’s not just for big businesses. Even basic cover can protect you if a client kicks up a fuss or something goes wrong on a job.
  
  

A bit of planning (and learning from others' mistakes) goes a long way. Keep things simple, stay on top of the basics, and you’ll be fine.

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From checklist to clients

Now that you’ve nailed the basics of how to set up as a freelancer, you can focus on what really matters: finding great clients, doing work you’re proud of, and enjoying the freedom freelancing brings.

Remember, freelancing isn’t about getting everything perfect from day one—it’s about showing up, learning as you go, and staying organised. With tools like Crunch to support your finances and partners like Hoxton Mix and Zempler to simplify your setup, you’re already ahead of the game.

Trust your skills, stay consistent, and don’t be afraid to ask for help when you need it. You’ve got this, now go find those dream clients.