Being self-employed can be extremely rewarding but it does bring with it certain responsibilities and obligations. One of the main advantages of working for yourself is how easy it is to set up and manage your own business. You can even become a sole trader if you are working for someone else as an employee, so you can test your business idea to see if self-employment is for you.
Once you have decided to set up your own business you will need to register yourself with HMRC. From the moment you register you will be responsible for paying your own national insurance contributions and tax. The way in which you register with HMRC will depend on your individual circumstances. Every year you will be required to complete and submit a self-assessment tax return. In addition to this, as a sole trader you will have to pay class 2 national insurance. If you earn over £8,060 you will have to pay 9% on your annual profits in class 4 national insurance contributions and 2% on any profits over £43,000.
If your business generates a turnover in excess of £83,000 you will need to register for VAT. If it looks like you are going to reach the VAT threshold in the next twelve months you must become VAT registered.
When you start up your business you should establish good financial recording systems from the beginning. To trade successfully it is important that you keep accurate records, as not only will this ensure that you are following the regulations but you will also find it much easier to manage your business.
Not only will this ensure that you are following the regulations but you will also find it much easier to manage your business.
There are many small business accounting packages that can make accounting much easier. Employing an accountant who specialises in self-employment registrations would be a great asset to your business. The Accountancy Network specialise in connecting all kinds of businesses with the right accounting professionals.