If you are looking to take the plunge and set up your own business then the easiest and fastest way to do this is to start up as a self employed sole trader.
There is little paper work required for the initial set up and there are no fees for registering yourself as self employed.
There various legal requirements and responsibilities that you will have, like paying your own tax, national insurance and any insurance associated with your business.
Once you have taken the first step of self employment you need to register with HM Revenue & Customs as self-employed.
Our How to Register as Self Employed checklist will help you make sure that you have put your business on a proper legal footing from the start. Tax Advantage can also provide the tax advice and guidance you require along the way as you continue in business.
Six Easy Steps To Becoming Self Employed
1. Your Business Name
First think what you business is going to be called you will probably spend more time on this than naming a child! However, you can simply use your own name as the business name. It is also important to ensure that no else is using the name you have chosen, this is because if you decide to become a Limited Company you must have a unique name. As most people would want to keep the same name when they incorporate it is an important step to consider.
2. Register with HM Revenue & Customs
You must register your new business with HM Revenue & Customs, you must do this within three months of starting. This is a simple process, you can register over the telephone by calling the Newly Self-Employed Helpline on 0845 915 4515 or online by completing the online registration form alternatively if you prefer paper forms you can complete form CWF1 and post it to HM Revenue & Customs CWF1 form. Important, if you do not register within three months of your business starting you could face a £100 penalty.
3. Paying Class 2 National Insurance
As a self employed person you will have to pay Class 2 National Insurance, for the tax year ending 5th April 2011 this was £2.40 per week, this is usually paid monthly by direct debit. In addition to this you will also need to pay Class 4 National Insurance on any profit over £5,715, this is the lower limit for tax year ending 5th April 2011. Class 4 National Insurance is collected via Self Assessment and is paid to HM Revenue & Customs along with your tax. From 6th April 2012 Class 2 is £2.50 per week.
4. Self Assessment Tax Return
Once registered with HM Revenue & Customs as self-employed you will be sent a Self Assessment Tax Return to complete at the end of the tax year. You have until the 31st January following the end of the tax year to submit your Tax Return to HM Revenue & Customs, if you submit a paper form you must submit it no later than the 31st October following the end of the tax year. Any tax and National Insurance due is payable by the 31st January.
5. Registering for VAT
VAT, you will have to register for VAT if your turnover exceeds £70,000 in any 12 month rolling period. You have 30 days to register for VAT from the first day your turnover exceeds £70,000.
6. Contact tax Advantage
Complete the Tax Advantage contact form and we will be delighted to provide you with a no obligation quote.
To find out what we can do for you