How To Register As Self-Employed
Being self-employed is an option when you need more flexibility from your job, or simply want to carve out your own path in a profession of your choosing. You will have more control over your income and schedule, but it’s important to understand that being self-employed involves a lot more responsibility than being an employee of someone else’s company. As a result, specific requirements must be met if you want to be considered legally self-employed in the UK.
At Joanna Bookkeeping, we understand that it’s important for you as a business owner to have control over the daily running of your business, but sometimes it can be hard to decide the right path to take…
We provide accounting services for self-employed people, and our Oxford-based accountants can offer you a professional perspective on self-employment. Our experts can help you when it comes to making important decisions like registering as self-employed, choosing the best accounting software for your business, and so much more!
What It Means To Be Self-Employed
Being self-employed means you are in charge of both the big picture and the day-to-day running of your business. You’re responsible for making sound decisions as well as handling tasks like paying yourself, keeping up with your taxes, and staying on top of general duties. Hiring other specialists like for example accountants can help you, but remember you’re still legally responsible for certain things. Running a business may sound great, but if you’re only expecting to do the nice things, it may be good to reconsider whether an employment route would be better for you.
Being self-employed means that you’re likely to:
- Run your business for yourself and take responsibility for its success or failure
- Have several customers at the same time
- Decide how, where and when you do your work
- Hire other people at your own expense to help you or to do the work for you
- Provide the main items of equipment to do your work
- Be responsible for finishing any unsatisfactory work in your own time
- Charge an agreed fixed price for your work
- Sell goods or services to make a profit
As a self-employed person, you can be a sole trader or in a business partnership.
Being in a business partnership comes with additional duties. It’s good practice to work with an accountant when it comes to making important decisions like this.
Business Name When You're Self-Employed
By being self-employed, you can trade under your own name and also choose another name for your business. Although you don’t need to register your name, you must include your name and business name (if you have one) on all official paperwork (such as invoices, etc).
It’s very important to mention that if you are a sole trader, you must not:
- Include the words ‘limited’, ‘Ltd’, ‘limited liability partnership’, ‘LLP’, ‘public limited company’, or ‘plc’ in your business name
- Be offensive
- Have the same as an existing trademark
Also, your business name can’t contain a ‘sensitive’ word or expression or suggest a connection with government or local authorities (unless you get permission).
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How And When To Register As Self-Employed
If you’re considering being self-employed as a part of forming a business partnership we have a separate article about it – How To Set Up A Business Partnership.
You’ll need to register as self-employed if you earned more than £1,000 from self-employment in a year. If you earned less than that you can use a Trading Allowance, however, it may be beneficial to still register. This will depend on your individual circumstances.
You have time by 5th October after your first tax year to register as self-employed. This means you can start trading first before officially informing HMRC that you are self-employed and running a business. A tax year runs from 6 April to 5 April.
Registering to be self-employed is relatively straightforward. You just go to the HMRC self-employment registration website, provide your email address and follow the registration process. You will be asked about a few details including your National Insurance number. You won’t get any tricky questions. It’s just so HMRC can identify you. Once you are registered as self-employed, you will have to start submitting your taxes via Self-Assessment.
P.S. The rules about reporting requirements are changing as part of Making Tax Digital for Income Tax. Make sure you read about those if you’re planning to register as self-employed.
When registering to be self-employed (and beyond), It’s important to make sure you abide by all applicable laws and regulations when it comes to keeping records of the income and expenditure of your business.
We hope this article has helped you have a better understanding of how to register as self-employed.
So, what’s next?
Having a free call with one of our Oxford-based accountants can give you real peace of mind that you’re making the right decisions going forward with self-employment. PLUS – because we’re fully digital, we offer services to businesses all over the UK!
Frequently Asked Questions
No, it's not a legal requirement for you to have a business name if you're self employed. You can, however, choose to have one. When registering with HMRC, you will have to provide them with your personal details including your real name. Your real name will also have to be included on official documents, for example, invoices you'll be issuing to clients.
You need to register if your income from self-employment is above £1,000 a year. If it's below that, you can use something that is called Trading Allowance and not register with HMRC. However, you may still choose to register as self-employed if your annual income is below the Trading Allowance.
You don't pay tax in your first year of self-employment. The deadline for paying taxes is 31 January following the end of the tax year. Don't confuse this with not paying taxes from your first year of trading. You will have to pay taxes if you make a profit (subject to Personal Allowance), however, the deadline to pay them isn't in your first year of trading.
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Oxford
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