Step 1: Register as self-employed
The first step for any new business owner is to register yourself as either a sole trader or limited company. Most tradespeople will choose to set up as a sole trader as it’s quicker and easier to set up. Whichever you choose, will have implications on how much tax and NICs (National Insurance Contributions) you pay to HMRC.
Choosing a business name
The foremost thing to consider when registering yourself as a sole trader is to come up with your business name. You can choose your own name, or a unique name which conveys your brand. While your name as a sole trader doesn’t have to be unique, you must ensure that your name is not offensive, that you are not going to cause clients any confusion and that you are not infringing upon anyone else’s trademark. You’ll also want to check that the website domain name is available. Your business name must then appear on all official paperwork, including your invoices.
Keeping track of your finances
In order to be a sole trader in the UK, you must commit to keeping accurate records of all your business sales and expenses. The more organised these are, the easier it will be to complete your Self Assessment tax return.
Completing a Self Assessment tax return
It is also a legal requirement that you complete your Self Assessment accurately and punctually by the end of January for the previous tax year.