How to get started with self-employment

working on a self-employment basis has several benefits

How to get started with self-employment

As either a freelancer or a contracted supplier for a company, working on a self-employment basis has several benefits.

Certain expenses become tax-free as they are part of your work, and you have a greater degree of financial freedom than others. However, getting started can be something of a struggle. Learn how to get started with self-employment:

What is self-employment?

Put simply, self-employment is when you don’t have an employer and are working for yourself as a freelancer or the owner of a business. The government will generally view a person as being self-employed if they choose to be recognised as such or if they are generating income that has to be filed via a tax return.

Steps to self-employment

The steps you have to take when becoming self-employed include:

1. Choose a trading name

As a self-employed person, you can choose to either trade under your own name or a business name. All of your documentation, official paperwork and letters should include this name. There are a few limitations, however. For example, a business name shouldn’t be offensive or include any version of “Limited” or “PLC”. It also can’t be the same as another trademark. Other than this, you can be as creative as you like.

2. Know the records you keep

Self-employed people have a series of records they need to keep. This includes tracking all sales and income, all business expenses, VAT records, PAYE records for your employees, and records surrounding your own personal income. Keeping these records is important for understanding the right amount of tax to pay, and by keeping as much proof as possible, you limit the chance of accounts facing further scrutiny.

3. Register for taxes

Depending on the industry you work in, there are different ways of registering to pay taxes. This ensures that you are on the right side of the law and limit the risk of accidentally committing tax evasion. Staying on the right side of tax laws is important and removes the risk of paying fines in the future.

Think Taxes are scary?

If you’re newly self-employed and don’t know where to start with your taxes, get in touch with the SQK Accountancy team to find out more.

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