It can be an ordinary current account – either with your current bank or with a different one. You don’t need to bother with a proper ‘business’ account, though. They tend to be expensive and pointless for freelancers and small businesses.

However, Alliance & Leicester and Abbey National Business both offer free business banking for small businesses. They both offer good value, but we particularly like Alliance & Leicester’s product – as the service and package are the best we have found.

Get an accounting system in place

Make sure you have a system you understand and will use. Just a basic Excel spreadsheet will do for most freelancers, although some people prefer to use actual cash books, a pencil and rubber to do their bookkeeping.

Our small business blogger, Kate Bendix, likes the accountancy software called Kashflow because it’s easy to use (not full of tedious accounting jargon), sorts out your invoices, cashflow management (very important), and even sends you reminders of unpaid invoices.

It’s an online service and has an annual or monthly subscription. If you join through us you can get discounts on both types of subscription.

Get familiar with the lingo

Download and read all the very useful information about being self-employed on the HMRC (Inland Revenue) website here.

You can refer to it whenever you have questions about what you’re entitled to, or what your responsibilities are.

Remember you can also phone them at any time. They are helpful and, importantly, free! They won’t ‘put a watch on you’ just because you have phoned either.

They much prefer people to be in touch than not to answer their calls or letters. They also have free tax workshops that are useful to go to when you start up.

Register for tax

Phone up the people at the tax office (0845 915 4515) or go to hmrc.gov.uk and let them know you are going freelance, i.e. becoming self-employed.

Ask them for your unique tax code. Everyone has a tax code but when you’re moving from employment to self-employment yours will change.

Once you have started as a self-employed person you will be responsible for paying your own tax twice a year, in January and July.

Organise your National Insurance payments

As a self-employed person, you’re responsible for taking care of your own National Insurance payments. You have to pay Class 2 and Class 4 National Insurance.

Class 2 is a fixed amount each month, Class 4 is a percentage of your profits. You can either pay it once a month or twice a year (we prefer doing it once a month because that way it’s less of a shock!). Talk to the tax office about how to pay yours.

Set money aside each month for tax

When you first get paid as a freelancer you will think that you’re doing rather well. That’s because you are not used to being paid ‘gross’ rather than ‘net’ (that is with the tax already taken out).

But next January and, again in July, you will get a tax demand in the mail, which will give you just under a month to pay everything owed to the Inland Revenue.

So, set up a high-interest savings account. Put about 25% of your income into it each month to be safe. That way you will have money when the dreaded tax and National Insurance bills arrive and hopefully have a bit left over for you.

Get a good accountant

Accountants are useful but trust your instincts while doing so and pick one who specialises in the field of freelancing and being self-employed. Ask friends who do the same kind of work as you. Would they recommend their accountant?

Take control of your finances

Hard to believe, but when you are self-employed tax becomes thoroughly fascinating. Knowing you could actually control the amount of tax you pay, is an extremely satisfying thought.

Keep a hold of all your receipts and keep a close eye on what money is flowing in and out. Your accountant will be able to advise good ways to save money on your tax bills which could save you hundreds or thousands of pounds a year.