Should you register as Self Employed?
This post is to help you establish whether you should register as Self Employed. Sometimes people are unsure whether they should be registered as self-employed for their online or offline profit-making activities.
I would advise you to read through this post and then if you find yourself ticking of items on these checklists then you will need to seek to register as self-employed. I will provide useful links at the end.
If you are working for yourself you are classed as a ‘sole trader’ this means that you are self-employed, this checklist should help you confirm if you should register as self-employed, some of this also relates to Ltd companies but the difference is if you have a limited company you are both owner and an employee of your company.
Checklist for being Self Employed
Make your own decisions on where and when you work
Hire others to help you or do work for you
You are responsible for the success or failure of your business
You provide the equipment to enable you to do your work
Charge an agreed fixed price for your work
Sell goods or services to make a profit, this includes online via websites or apps
Responsible for completing any unsatisfactory work in your own time
Also note that you can be both employed and self-employed at the same, if you are working at a day job during the day for an employer and then you run your own business out of your normal working hours you are then self-employed for your own business activities.
If you think you fall under the ‘trader’ category you are also self-employed the following checklist relates to traders.
Do you trade?
Sell to make a profit
Make items to sell for profit
Regularly sell online or via classified ads, car boot sales or similar
Earn a commission for selling goods for other people this includes online activities such as affiliate income.
Are you paid for providing a service
If you are just selling unwanted items occasionally and are not seeking to sell regularly to make a profit this is classed as more of a hobby and you do not need to register.
What to do next
The criteria for registering as Self Employed is if you are earning more than £1,000 from these activities within the financial year.
1. Check employment status for tax at HMRC
2. Register as Self employed
3. You will then be enrolled for the online Self Assessment service
4. Wait for your letter containing your 10 digit unique taxpayer reference (UTR)
5. Wait for your activation code (within 10 days)
Once you have received this information you are all set for your Self Assessment Returns.
I hope you found this post useful if you are still not sure I would highly recommend you contact HMRC and they will answer all of your concerns.