Becoming self employed: top tips to get started

Becoming self-employed requires a level of organisation and planning that you wouldn’t normally have to do when you’re working for a business or organisation.

HMRC recommends that you register as self-employed as soon as you start earning over £1000 a year; so, it’s important to register as soon as you begin working to avoid any fines or penalties.

Becoming self-employed can seem like a daunting process to some - to make sure you hit the ground running we’ve broken the process down into easy steps. 

1. Ensure you have all of the required information

Before you head over to the HMRC website and embark on the registration process, you’re going to need your personal information to hand. This includes your proof of identity, national insurance number, contact details and relevant financial data.

2. Complete the online registration form

Once you have all of the necessary information at your fingertips, head over to the online registration form on the HMRC website. This form is designed to capture details about your new business – the nature of your work and your expected annual income. The form itself is straightforward and easy to navigate, however you’re advised to take your time and take care to enter your information accurately to ensure a smooth process. Once you’ve done this, you should then receive your UTR (Unique Taxpayer Reference) which will identify you as self-employed.

3. National Insurance Contributions

It’s important to remember not to overlook your contributions to National Insurance. Paying your National Insurance will enable you to claim a state pension along with other useful benefits.

4. Keep accurate records

Any self-employed individual will tell you that effective record-keeping will be central to your success as a freelancer. As soon as you begin earning it’s essential to keep a detailed record of not just your income, but your expenses and copies of all of your receipts. This will also be beneficial in helping you keep track of your financial health and inform future business decisions, as well as making the tax return process run as smoothly as possible.

5. Claim your Business Expenses

One of the great things about registering as self-employed is that you’re entitled to claim business expenses which will reduce the overall tax you have to pay. Make sure to keep records of all receipts relating to any expenses you have that relate back to your business – this can be anything from any work-related equipment, travel expenses and professional development courses. 

6. Choose an accountant

Even if you manage to save and record all of your receipts, invoices and expenses, organising your taxes can seem like a mammoth task. If you have the means, it’s always good to receive professional advice from an accountant. Although these sometimes come at a premium, their expertise can ensure that you’re complying with the relevant tax laws and could save you money in the long run.

7. Stay Ahead of the Game 

In the UK, tax and regulations are ever-changing. Keep yourself informed by staying updated on any regulatory changes, new best practices and investing in your own learning and development. 

We will be shining a spotlight on Small Business Owners, self-employed, freelancers, and side-hustlers to find out what it takes to run your own business and what entrepreneurship really means in the UK today. Visit our startup hub and don’t forget to follow our hashtags #StartingUp2024 #SmallBusinessOwners for business startup news and guides.

*This blog is if for information only and not intended for the reader to rely upon when making important life/business decisions and that professional advice should always be sought in such circumstances.