When you decide that self employment is right for you, it’s important to prepare yourself for what is needed to be on the right track. The one thing you cannot dismiss is setting yourself up with HMRC and making sure you are compliant with your taxes.
Keep up to date with your accounting
When you start as self employed, you will need to register as a sole trader with HMRC, which you can do online. There are other business structures, but when you start at a minor scale you would normally register as a sole trader. It’s also important to keep your accounting records correctly. You can do this manually, although you would more likely want to digitalise your records because from April 2026, MTD for self assessment will be obligatory for people earning over £50,000.
You also need to be aware of VAT and you must be VAT-registered if you go past the threshold of rolling annual basis of £85,000. If you are in the construction industry, then you may well be under the Construction Industry Scheme (CIS) where contractors deduct money from a subcontractor’s payments and pass it to HMRC.
Stay on top of your day-to-day business
Part of the responsibilities of starting your own business is to make sure you stay on top of your day-to-day business. Firstly, you must set up a business account to separate your personal and private income. It’s also important to establish a process of recording your profits and evidence of your business expenses. This will help you to organise your accounting.
This may not apply to you straight away, but if you are successful and grow your business then will you need to register any employees with HMRC. You need to file your employees’s wages through a software.
If you need help to set yourself up as a sole trader or need help to stay compliant with your accounting, then please contact us.
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