Geoffrey Caesar, Solicitor

Self-employment is when you run your own business and work for yourself. This is also known as being a sole trader. You can keep all your business’s profits after you’ve paid taxes on them. You’re personally responsible for any losses your business makes. You must also follow specific rules for running and naming your business.

Some of the benefits of self-employment are:

• You have more control over your work and how you do it.
• You can choose your hours and work-life balance.
• You can pursue your passion and creativity.
• You can take advantage of tax deductions and allowances.

Some of the challenges of self-employment are:

• You have to deal with all the administrative and financial aspects of your business.
• You have to pay your tax and national insurance contributions.
• You have very few employment rights and protections.
• You have to cope with uncertainty and risk.

To be self-employed, you need to:

• Register with HM Revenue and Customs (HMRC) as soon as you start working for yourself.
• Keep records of your income and expenses.
• Complete a Self Assessment tax return every year.
• Pay income tax and national insurance on your profits.
• Register for VAT if your turnover is over £85,000 a year.
• Consider getting insurance for your business, such as public liability or professional indemnity.

Self-employment is not defined in employment law, but it is a category HMRC uses for tax purposes. You’re usually self-employed if you:

• Run your business for yourself and take responsibility for its success or failure.
• Have several customers at the same time.
• Can decide how, where and when you do your work.
• Can hire other people at your own expense to help you or to do the work for you.
• Provide the main items of equipment to do your work.
• Are responsible for finishing any unsatisfactory work on your own time.
• Charge an agreed fixed price for your work.
• Sell goods or services to make a profit.

Self-employment differs from being an employee or worker with different rights and responsibilities. You can check whether you’re self-employed online using the check employment status for tax tool or by phone.

Contact me for further advice or any documents you need to run your business, such as terms and conditions for client use.