Claer Barrett Published October 3 2026 Jump to comments section Print this page Unlock the Editor’s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Do you dream of becoming your own boss? Accountants tell me they are encountering more clients in their forties and fifties who are leaving senior professional roles because they want more autonomy and to build something for themselves. For some, the switch to a freelance career has been prompted by a corporate restructuring, redundancy programme or the growing number of employers demanding a return to the office.
Yet others feel they can do more and earn more with greater flexibility if they start something of their own. “A lot of people are building out their personal brand and doing things in addition to their corporate career, which could be the first step towards starting their own business,” says Nicole Zalys, founder of Villiers & Co and better known online as The London Accountant. If you’re weighing up a more entrepreneurial path, thinking about the financial side of your freelance life is vital — here are six points to consider: 1. Know your numbers What would you have to earn to replace the certainty of a monthly salary? Scrutinise your household expenses — what’s the bare minimum you’d need to earn (after tax) to meet these commitments? Many new freelancers I’ve helped in recent years confessed they only had a vague idea of this, but if you have a variable income, keeping a keen eye on the budget is non-negotiable. 2.
Separate your personal and business finances Allowing money to intermingle makes it harder to know where you stand, project your income and, crucially, your tax liability. Not putting tax money aside is the easiest mistake to make, but Making Tax Digital means keeping separate records on approved accounting software a necessity. Those generating more than £50,000 in revenue (not profit) from self-employment or property rental need to register and file quarterly updates to HM Revenue & Customs.
From next April, this threshold will fall to £30,000. Most digital banks offer free HMRC-compliant software with their sole trader or small business accounts, but scrutinise what else you’ll be charged for. Three words you need to understand? Payments on account.
Once you generate a certain amount of income from self-employment, HMRC expects you to pay half of next year’s estimated tax bill in advance in January with a second payment in July.3. How to price your services This is the hardest thing for new freelancers to get right, but it’s the difference between succeeding and struggling, says Deborah Edwards, director of Harland Accountants. Even after researching what others charge, the temptation to undersell your services to get work can be hard to resist.
She advises standing in front of a mirror and practising saying “My day rate is £X” to get used to it. “You don’t have to charge the same price to everyone, but when you have negotiated a rate, agree a contract setting out what’s expected and beware of scope creep. If the client asks for something extra, say ‘Of course I can. Would you like me to put a quote together for you?’” “Your fee isn’t just your ‘wage’: you’re paying your own tax and national insurance, and need to factor in the paid holiday and sick leave you would have had as an employee, as well as all those unbillable hours spent quoting, emailing, invoicing and sometimes travelling,” says private chef Philippa Davis. 4.
Get an accountant Accountants can advise you on allowable expenses that you can offset against tax, which usually includes their fee. Deciding whether to set up as a sole trader or a limited company is an important question to discuss. “You also need to talk about how you are going to draw an income or take money out of the company; how much tax you will probably have to pay and when and whether you should register for VAT,” Zalys says. Be aware that the £90,000 VAT threshold i...
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