So you’ve decided going Self Employed suits your requirements. Here’s some useful tips to help you get started and make the admin much easier in the long term.
Here are some practical steps for you to consider and take when wanting to set up as self employed in the United Kingdom. HMRC also provide their own guides: gov.uk/browse/business/setting-up
You will need to tell HMRC that you intend to trade as a self employed person so that they know to send you a tax return at the end of the tax year.
This can be done online at: gov.uk/register-for-self-assessment
This will be sent to your address and is important to keep hold of as it allows you to make sure any taxes paid go against your account at HMRC rather than another self employed person.
This allows you to communicate with HMRC for its taxes like, VAT, PAYE, CIS and Personal Tax as well as receive electronic notices rather than physical mail.
For more information visit: gov.uk/log-in-register-hmrc-online-services/register
A separate bank account for your business is good practice when you are self employed as it will make keeping track of your business income and expenses easier than if you had to pick them out of a personal account that has all your other transactions in.
HMRC don’t require self employed people to have a separate account however, so should you deem it fine to have business and personal expenses in one account, then you won’t be penalised for this.
Considerations for choosing which bank to open an account with could be:
When the business first starts you may feel that a bookkeeping package isn’t needed; pen and paper will be good enough. However they can help you keep on top of your finances.
Some really good ones like Freeagent estimate all the different taxes in real time, making it easier to put aside money for HMRC so you don’t get behind.
Some are even free when you setup with certain banks. At the time of writing this, if you setup with NatWest or Mettle then you would get Freeagent for free for life, saving you over £240 per year on bookkeeping software.
Once you have your business name, you may need a brand and online presence to promote your offering. You might want to check out Genius Division to start because they offer support for startups, have fantastic experience of lots of sectors and are an all round great set of people.
You might need support with many areas including:
Very important for any business. It gives you and others peace of mind that should anything go wrong, there is protection. Some businesses are more risky than others, and having a good insurance policy to cover those risky areas might help you worry less and get on with running your business.
Insurance policies to consider could be:
Some sectors of the economy can be highly regulated. Make sure all your certification is registered in your business’s name by your regulator, as well as making sure anyone trading from it is covered.
This isn’t required straight away but it could help the business keep its costs down. Check out our Resources section for detailed information on VAT, alternatively we’d be happy to talk you through the benefits of registering for VAT, and even help you filling out the forms if needed.
For more information visit: gov.uk/vat-registration
This may not be required straight away but worth a little conversation about the benefits of setting up. This is required if you wish to employ someone so that you are able to forward any taxes that the business deducts on their pay.
For more information visit: gov.uk/register-employer
This may not be required depending on your industry, but if you plan on working in the construction sector and will be either working for subcontractors, or paying subcontractors then you will most likely need to become registered for this.
For more information visit: gov.uk/topic/business-tax/construction-industry-scheme
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