The self employment checklist – what you need to know
If you’re looking to become self employed, there are a number of things that you need to know first, including rules around tax and pension plans for self employed small business owners.
The rules and regulations that surround working for yourself can be difficult to navigate, so we’ve created a checklist covering all aspects of becoming self employed.
Use the links within each section to view more in depth information and advice on each section of self employment.
Self employment and insurance
Insurance is one of the easiest ways to make sure that you, your family and your business is protected from every eventuality. As part of the self employment process, arranging relevant insurance cover should be one of the top priorities.
The type of insurance cover you’ll need as a self employed business owner will differ, depending on the type of work you do or business you run. You’ll need to find cover for a wide-range of instances, including a policy for your staff and additional insurance if you work from home.
Find out more about insurance for self employed professionals:
Income protection insurance policies
Public liability insurance
Professional indemnity insurance
Employers liability insurance
Follow this link for more advice on the type and level of insurance you’ll need when you’re registered as self employed.
How to register as self employed
One of the first tasks you’ll need to complete when setting up your company is to register as self employed. It’s your responsibility as a self employed trader or business owner to manage your tax returns, VAT payments and National Insurance payments.
Our step-by-step guide covers everything you need to know, including:
Registering as self employed by phone, web or post
Which documents to send HMRC when registering as self employed
Information about tax returns, VAT and National Insurance
Follow this link for more advice on registering yourself as self employed.
Self employed tax advice and rules
The biggest change when making the transition from employee to business owner is your tax status. You may have previously been paying tax on a PAYE basis, meaning tax and NI payments are automatically taken out of your salary.
As you’re now self employed, you’ll now need to pay your tax yourself by filling out a tax return for each tax year. On top of this, you’ll need to consider VAT payments for products and services, NI payments and PAYE arrangements for any person you employ.
Find out:
What a self employed tax return is
How to calculate the amount of tax you’ll need
Seeking financial advice from an accountant when you become self employed
When to fill out your self employed tax return
Follow this link for help and advice on self employed tax advice and rules.
Self employment and pension plans
Another topic you’ll need to think about when setting up as self employed is your retirement. You may currently be paying into a workplace pension scheme through your employer.
This will all change when you become self employed. You’ll be in charge of your own pension and will need to make your own payments.
Here we’ll explain more about self employed retirement, including:
Setting up a self employed pension fund
Passing on a self employed business
How to retire when you are self employed
Follow this link for more in depth information on pensions as a self employed person.
What is a sole trader?
When you register as self employed, you become the sole trader of your business.
What is a sole trader? A sole trader is the exclusive owner of a business or company. In effect, the responsibility of that business and all aspects of it rest on the sole trader.
This means you’re wholly liable for any debt, legal proceedings and employee disputes. However, you will receive all the profits made from your business after paying tax.
Our informative guide covers all aspects of being a sole trader, including:
The difference between being self employed and a sole trader
Alternatives to being a sole trader, including setting up a private limited company
How to set up as a sole trader
The benefits of being a sole trader
Follow this link to find out more about the difference between being self employed and being a sole trader.
Where to go for self employment advice and guidance
Looking for self employment advice and guidance? There are numerous resources out there to help you make the break, including our very own Start Up Loans guides.
As a Start Up Loan beneficiary, you’ll receive free mentoring and advice from our delivery partners and business experts.
Alternatively, you’ll find numerous guides on the official government website, self-employment advice lines and other online resources.
In this section we’ll discuss in detail the options available to you, including who to contact if you have a query or question about any of the above topics, from setting up as self employed to creating your first tax return.
Follow this link to find out more about the help and support offered to small businesses and self employed from the Start Up Loans Company.
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