What does it mean to be self employed in the U.K.
- Firstly you are the business, so you are working for yourself.
- Your responsible for paying your own tax and n.i contributions
- The total running of the business rests with you unless you can afford to employ others
- You need to sort out your business plan especially if you need to borrow money
- Keep accounts of income and expenditure
- What can be offset against your liability for tax (all running costs and if working from home can claim some of the costs of utility bills
- If you have employees your responsible for the payroll, sick pay and perhaps contributions to a pension scheme
- Should you decide to be a sole trader you are responsible for all liabilities , if the company was to fold you would have to pay all outstanding debts and if you are unable to do so any assets you own including your home can be used to do this. Your accounts would remain private
- Limited company would mean the liabilities for any debts are the responsible by the company as it becomes its own entity however you would need to register with Companies House and adhere to there rules and your company details is in public domain if your trying to build up credit this may help as it would give lenders an overview of how the company is progressing.
Going into business for yourself whilst exciting can be very daunting at the same time there is help and advice out there and depending on your circumstances you may be able to access free workshops etc to help you get going and understand best way to proceed.
There are a number of organisations out there to help such as Business Gateway if your in Scotland or Chamber of Commerce, they offer business start up advice, workshops to help you understand the running of a business and the responsibilities you have.
Inland Revenue also run an online course or there is a chat line service available for those filling in a return for the first time if you want to find out more check out www.gov.uk there are many resources relating to tax queries.
If you do not feel confident is doing your own tax returns you can consider hiring an accountant to do this for you but make sure you know the costs involved up front.
Depending on the type of work you are doing you will also need to look at what insurances you will need, if your selling products you will need product insurance, if your going into peoples home or you have an office you will need public liability so you will need to know what is involved and the costs to.
Make sure you shop around the bank will try and sell your theirs but it is not always the best deal, again you can always contact Chamber of Commerce for advice.
Do not use your personal account for business matters make sure you open a business bank account there are many who will give you free banking for one year sometimes longer once again shop around, personally I prefer to have a different bank to my personal one.
Business Banking also offers some support either by having a personal adviser or could be a monthly newsletter offering advice.
There is also many networking groups or breakfast clubs that meet up on a regular basis to help support one another or give advice this is a good way to meet like minded people and help build up resources, check the Chamber of Commerce paper they have listings there also worthwhile checking local newspapers to, look for local connections online to if you use the internet.
Out of safety please make sure you meet in a public place when arranging to meet someone you have gotten to know online and let someone know where you are get them to call and check all is ok during the meeting
If you are not sure how to do your taxes you can get help online or sometimes there are free workshops locally to help you, once again check with your local Chamber of Commerce or Business Gateway