For many Italians, moving to the United Kingdom represents a fresh start — a place where creativity, independence, and opportunity meet. It’s no surprise that a growing number of Italians in the UK are choosing to work as freelancers, embracing flexible working patterns in sectors like design, consulting, marketing, hospitality, IT, and translation.
But with independence comes responsibility — especially when it comes to taxes. Unlike traditional employees, freelancers must manage their own income reporting, tax payments, and compliance with HMRC (His Majesty’s Revenue & Customs).
This guide explains everything Italian freelancers need to know about the UK tax system — from registration and deductions to double taxation and smart financial habits — so that working abroad feels rewarding, not confusing.
1. Freelancing in the UK: What It Means for Italians
Freelancing in the UK is relatively straightforward, but the tax system can feel unfamiliar to those coming from Italy.
In the UK, if you work independently (without being employed by one specific company), you are classed as self-employed. That means you earn income directly from clients, not via payroll.
The UK’s system gives freelancers a high degree of flexibility — but it also expects them to handle their own financial affairs.
To work legally and remain compliant, Italian freelancers must:
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Register as self-employed with HMRC.
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Keep financial records of income and expenses.
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Submit an annual Self-Assessment tax return.
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Pay Income Tax and National Insurance Contributions (NICs).
2. How to Register as Self-Employed with HMRC
When you start freelancing, you must register with HMRC as self-employed — usually through the HMRC website.
Here’s how to do it:
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Visit GOV.UK and create a Government Gateway account.
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Register for Self-Assessment and declare that you are self-employed.
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You’ll receive a Unique Taxpayer Reference (UTR) number, which identifies you for tax purposes.
You should register by 5 October following the end of the tax year in which you began freelancing.
For example:
If you started freelancing in June 2025, you must register by 5 October 2026.
3. Understanding the UK Tax Year
The UK tax year runs from 6 April to 5 April of the following year.
After each tax year ends, freelancers must file a Self-Assessment tax return by:
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31 October (if filing by paper), or
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31 January (if filing online).
This same 31 January deadline is also when most freelancers must pay their tax bill — so planning ahead is essential.
4. How Much Tax Do Italian Freelancers Pay in the UK?
Your tax depends on how much you earn.
For the 2025/26 tax year, the main Income Tax bands in England are:
| Tax Band | Taxable Income Range | Rate |
|---|---|---|
| Personal Allowance | Up to ÂŁ12,570 | 0% |
| Basic Rate | £12,571 – £50,270 | 20% |
| Higher Rate | £50,271 – £125,140 | 40% |
| Additional Rate | Over ÂŁ125,140 | 45% |
This means the first ÂŁ12,570 you earn is tax-free, while the remainder is taxed progressively depending on your total income.
In addition, self-employed workers must pay National Insurance Contributions (NICs):
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Class 2 NICs: Flat weekly rate (around ÂŁ3.45 per week) if profits exceed ÂŁ12,570.
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Class 4 NICs: 9% on profits between ÂŁ12,570 and ÂŁ50,270, then 2% above that.
5. Deductible Business Expenses
One of the major benefits of freelancing in the UK is that you can deduct business expenses from your taxable income.
Common deductible costs include:
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Office supplies and equipment.
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Software subscriptions (e.g., Adobe, Zoom, accounting tools).
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Professional memberships and training.
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Travel expenses (when visiting clients or job sites).
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Home office costs (a portion of rent, utilities, and internet).
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Marketing and website expenses.
You can also use simplified expenses — fixed rates for home working and vehicle mileage — to make things easier.
Remember: expenses must be “wholly and exclusively” for your business. Mixing personal and business costs can cause problems if HMRC reviews your return.
6. Invoicing and Record-Keeping
In the UK, freelancers must issue invoices for every piece of work and keep detailed records of income and expenses for at least five years.
Invoices should include:
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Your name (or business name) and address.
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Client details.
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Date and invoice number.
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Description of services provided.
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Amount charged (plus VAT, if registered).
Many Italians find it useful to use cloud-based accounting software such as Xero, FreeAgent, or QuickBooks, which integrate directly with HMRC and simplify tax calculations.
7. VAT and Italian Freelancers
If your annual turnover exceeds ÂŁ90,000, you must register for Value Added Tax (VAT).
Once registered, you must:
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Charge VAT (usually 20%) on your invoices.
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File quarterly VAT returns.
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Pay HMRC the VAT collected (minus any VAT paid on business purchases).
Even if your income is below the threshold, voluntary registration can be useful — especially if your clients are VAT-registered businesses, allowing you to reclaim VAT on expenses.
However, VAT can complicate bookkeeping, so getting advice before registering is wise.
8. Double Taxation: Paying Taxes in the UK and Italy
A common question among Italians freelancing in the UK is: Do I have to pay taxes in both countries?
Fortunately, the UK and Italy have a Double Taxation Agreement (DTA). This ensures you don’t pay tax twice on the same income.
Here’s how it works:
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If you are UK tax resident, you pay tax only in the UK on your worldwide income.
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If you are Italian tax resident but earning in the UK, you may pay UK tax first and claim a foreign tax credit in Italy.
Determining your tax residency depends on where you spend most of your time and where your main economic interests lie.
For most Italians living and working primarily in the UK, HMRC considers them UK residents — meaning they only file in the UK.
If you split time between the two countries, professional advice is essential to avoid errors or overpayment.
9. The Importance of Self-Assessment
The Self-Assessment system is how UK freelancers report income and pay tax.
Each year, you must:
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Complete your online return by 31 January.
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Declare all sources of income — UK and abroad.
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Deduct allowable business expenses.
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Pay your final tax bill (and sometimes “Payments on Account” for the next year).
Late submissions or payments lead to automatic penalties, starting from £100 plus daily interest — so setting calendar reminders or using an accountant is strongly recommended.
10. Common Mistakes Italian Freelancers Should Avoid
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Missing registration deadlines (5 October).
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Forgetting to keep receipts or mixing personal and business expenses.
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Ignoring VAT obligations when income grows.
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Underestimating payments on account, leading to cash flow stress.
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Not declaring foreign income, even small amounts.
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Assuming Italian tax rules apply — UK law is different.
Understanding these differences early prevents headaches later.
11. Using a Professional Accountant
While many freelancers start out managing their own taxes, UK tax rules can become complex — especially when dealing with international income, multiple clients, or VAT.
Working with a qualified accountant helps ensure compliance and maximises available reliefs.
One trusted option for expatriates and freelancers is My Tax Accountant — a UK-based firm specialising in personal tax services. They provide tailored support for self-employed professionals, including guidance on Self-Assessment, allowable expenses, and foreign income reporting.
Having expert help means more time focusing on your business — and less time worrying about forms, numbers, and deadlines.
12. Saving for the Future: Pensions and Long-Term Planning
In the UK, freelancers are responsible for setting up their own pension.
A Self-Invested Personal Pension (SIPP) allows freelancers to contribute savings that grow tax-free — and you receive tax relief on contributions, meaning HMRC effectively adds extra money to your pot.
For example, contributing ÂŁ800 to a pension results in ÂŁ1,000 being invested (the extra ÂŁ200 comes from tax relief).
Freelancers from Italy who plan to remain in the UK long-term should consider this as part of their financial strategy — not just for retirement, but also to lower taxable income today.
13. Planning for Irregular Income
Unlike a monthly salary, freelance income fluctuates. To stay in control:
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Set aside 25–30% of every payment for taxes and NICs.
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Keep a separate “tax account” so you’re never caught off-guard.
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Use tools like Monzo Business, Revolut Business, or Starling to automate savings and invoicing.
Good financial discipline ensures you’ll never dread the January deadline.
14. Life Between Two Countries: Italian Bank Accounts and Currency Transfers
If you still have a bank account in Italy or receive payments from Italian clients, be mindful of currency exchange rates and reporting requirements.
While you can hold funds abroad, any foreign income must still be declared in your UK Self-Assessment return if you’re a UK tax resident.
Many freelancers use multi-currency accounts like Wise or Payoneer to receive payments efficiently and transfer between GBP and EUR at low cost.
15. Making Tax Digital (MTD) — What’s Changing
The UK government is modernising the tax system under Making Tax Digital (MTD).
From April 2026, freelancers earning above ÂŁ50,000 will need to:
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Keep digital records of income and expenses.
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Submit quarterly updates to HMRC instead of one annual return.
Those earning between ÂŁ30,000 and ÂŁ50,000 will follow a year later.
This means that using digital accounting tools isn’t just convenient — it will soon be mandatory.
16. The Benefits of Understanding the System
For Italians living abroad, understanding how UK tax works brings peace of mind. It allows you to:
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Budget more accurately.
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Avoid penalties.
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Access all eligible deductions.
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Feel confident you’re contributing fairly and legally.
The UK system rewards organisation and transparency — qualities that every successful freelancer should embrace.
17. Conclusion: Working Smart, Staying Compliant
For Italian freelancers, the UK offers tremendous opportunity — a thriving economy, flexible work structures, and a welcoming environment for independent professionals.
But with that opportunity comes the duty to understand and follow local tax laws. By registering properly, keeping clear records, claiming legitimate expenses, and staying informed about deadlines, Italian freelancers can enjoy the best of both worlds: freedom and financial security.
And when in doubt, seeking expert help ensures you never face unnecessary stress or penalties. Firms like My Tax Accountant provide the clarity and personal guidance that make freelancing in a foreign country not just possible, but profitable.
In the end, working “smartly” doesn’t just mean doing what you love — it means managing your taxes wisely, too.
