Print Reseller Scheme
  1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Self Employed - Sole Trader

Discussion in 'General Business Forum:' started by putting-out-fires, Sep 27, 2012.

  1. putting-out-fires

    putting-out-fires New Member

    Hi all, before I ask my questions I want to say sorry if this has all been covered before. I have read some conversations on becoming self employed as a sole trader on the forum and got some very useful information but I still feel a little concerned about taking the plunge and before I do I need to get a few questions I have sorted.

    Basically I've done lots of bits of work but these have been unpaid and favours. I have designed posters and bits and bobs for a local charity that my wife is involved with as well as for a couple of retail ventures my friends have set up. All this has been done for free. However I have got opportunities coming up to do paid work, some of which could be on-going and need to therefore set up for tax. I will be employed full time paying PAYE as well as setting up and working on my business.

    My main questions are:

    1) What do I need to have set up/what information do I need to hand when I contact our friends at HMRC?

    2) Should I do this now or should I wait until I am actually working on the designs, but before any money changes hands? I ask this because I believe you are told by the HMRC not to register until you are self-employed and working.

    Again sorry if this is going over 'old ground' on the forum but any advice would be great.

  2. Squiddy

    Squiddy Guest

    Heya, I went through this process a little while ago.

    You need to register with the HMRC for two things (minimum) Self Assessment and Class 2 National Insurance contributions. You only need to worry about PAYE if you're employing other people. Note that they do differentiate between full-time employment as an employee and self employment. If you are working for the same person/company for long periods of time and on multiple projects you will be treated as an employee and not self employed, you might also face some kind of penalty/fee for not stating the correct employment type.

    You need to register as soon as you are self employed even if that's before your first paying job. You won't incur any penalties for registering before they considering you to be self employed but you could incur a penalty for not declaring it soon enough - best to be safe rather than sorry in this instance. I don't know anyone that would say HMRC are your friends... don't give them any opportunities! My accountant told me that I absolutely must register within the first three months of becoming self employed, best to get it done ASAP.

    If you haven't already, I would also recommend setting up a business banking account and ensuring that all of your income and outgoings are kept separate from your personal ones.
  3. putting-out-fires

    putting-out-fires New Member

    Great advice thank you, will speak to HMRC today although I really don't like dealing with those guys as whilst there is a lot of information on their website the whole system still seems set up to trip you up by not completing a specific stage when you are meant to. I can't get away from the fact that they seem to make the process trickier then it has to be in order to trip people up and subsequently fine them, although I could just be being paranoid. :)

    Thanks again!
  4. Squiddy

    Squiddy Guest

    No, it's a part of Government that takes money from the people, the hard working people at that. I doubt they will be playing nice with anyone soon... maybe I'm just being paranoid but I don't think so! :ph34r:

    You might want to look into hiring an accountant who will know a lot more about this stuff than anyone here. I pay mine £100 a year and he sorts everything for me B)

Share This Page