Taking the leap from steady employment to being your own boss is tough. It can be hard and exhausting, but in the end you may find that it’s totally worth it. If you’re wondering how to make that decision and finally become self-employed, here’s a step by step guide to embracing what you want and taking that leap once and for all…
Before you’re declared as self employed, there are a few things you will need to do. These include telling HMRC that you’re self-employed, and getting insurance. You can call the Self-Employed Helpline for information on how to do this.
Once you have done this, you will need to decide on a business structure. Usually, setting yourself up as a sole trader is the best option, and is usually the easiest option if you’re new to the process.
Setting yourself up as a Sole Trader
When setting yourself up as a sole trader, you will need to register with HMRC. You will then need to set up a business account with a bank of your choosing, and establish how you will record your profits. This can be via spreadsheet or word document. Doing this will make it a lot easier to complete a tax return down the line. You will also need to set up a private pension, as you will no longer be in a place of work that requires you to make contributions to your pension.
How much tax you pay once you’re registered as self employed will depend on your profits. For an accurate example of how much tax you may need to pay, call the HMRC.
Can I claim for anything if I’m Self-Employed?
Depending on how much you earn, you may be able to claim income support or universal credit. If you plan on doing this, you will need to prove to HMRC that your business is regular, structured and ongoing in a bit to create a successful business.
You can also claim for housing benefit and universal credit if you are registered as self employed. For more information on this, you should call HMRC and speak to a member of the staff.
Guest post by Gina Kay Daniel.