According to data from Statista, there were around 4.39 million self-employed workers in the UK as of January 2025, with increasingly large numbers of people turning their backs on traditional employment.
Now this could be for a variety of reasons. For example, people may want more freedom and control over their own schedules. Or perhaps the availability of online platforms in this day and age has simply made it easier for people to finally take the leap and go it alone.
Either way, freelance work continues to grow in popularity as more and more companies look to take advantage of the online marketplace and outsource certain tasks to those with specialised skill sets.
Before you take the plunge, it’s crucial to identify your strengths and choose a niche where you can truly shine. After all, focusing on what you do best sets you up for long-term success.
There’s never been a better time to start freelancing – so let’s get into it!
What is a freelancer?
Quite simply, a freelancer is a self-employed professional who offers their services to various clients, usually on a project-by-project basis.
It means you’re your own boss and get to decide when, where, and how you work. This increased flexibility ultimately enables you to be selective when it comes to choosing the projects you want to work on – and the people you want to work for.
Really, though, you don’t work for anyone but yourself.
You can also set your own rates, meaning you’ll potentially earn more than you would in a regular job with a fixed (or long-term) contract.
 
What taxes do freelancers need to pay?
This largely depends on the business structure you choose, but a freelancer’s tax obligations typically include Income Tax on the profits left over after you deduct any allowable business expenses.
The type of National Insurance self-employed people pay is separate to any NI you might pay as an employee, unlike Income Tax. Class 4 NI contributions are paid as a percentage of any self-employed profits you earn over the £12,570 NI threshold.
You might also need to think about things like Student Loans deductions and, if this is your only source of income, pensions!
 
How do I pay tax on my freelance income?
As a sole trader you’ll need to submit Self Assessment tax returns to report your earnings although, starting from April 2026, some sole traders will begin using Making Tax Digital (MTD) for Income Tax (which will replace Self Assessment if you’re eligible for it).
 
What are the top freelance jobs?
So, which freelance jobs are on the rise in 2026?
It should come as no surprise that AI or prompt engineers are currently in high demand, with these professionals helping companies to thoughtfully integrate artificial intelligence into their services and business practices.
AI isn’t going anywhere; it’s only going to become more important as technology improves over time. So why not give yourself a head start?
In the same realm, it’s also a good time to be a machine-learning engineer. As one of these, you’re responsible for the development of the actual AI algorithm, training it to behave and respond in the right way.
Alternatively, you could offer your services as a cybersecurity developer, working to assist clients in fending off things like malware and other online threats. This role is crucial in today’s digital world.
Another freelance job on the up is that of financial consultant, where you advise clients on how best to use their valuable assets.
If these roles don’t sound like they match your skillset – classic freelancing roles such as copywriters, digital marketing specialists, virtual assistants and data entry clerks are still thriving into 2026. It’s all about finding what works for you.
 
Keeping records as a freelancer
Whether you like it or not, bookkeeping is an essential part of managing a business’s financial health. It’s also a requirement!
This process involves recording the daily transactions which take place in your business. This will help you keep track of your income vs. expenses, which is essential for your tax return as well as monitoring what works in your business.
Generally speaking, the amount of tax you pay depends on your profits, which is why it’s important to keep good records.
If you’re a sole trader, there’s no legal distinction between you and your business, so your business’s profits are yours to keep once you’ve paid tax – another reason why it’s so important to keep records!
A good accountant can help make sure you’re doing everything right and operating in the most tax-efficient way possible.
Find more help in our online accounting hub, and learn more about how to find the right accountant for your business.
