https://www.gov.uk/working-for-yourself

Working for yourself

If you start working for yourself, you’re classed as a sole trader. This means you’re self-employed - even if you haven’t yet told HM Revenue and Customs (HMRC).

 

Running a business

You’re probably self-employed if you:

  • run your business for yourself and take responsibility for its success or failure

  • have several customers at the same time

  • can decide how, where and when you do your work

  • can hire other people at your own expense to help you or to do the work for you

  • provide the main items of equipment to do your work

  • are responsible for finishing any unsatisfactory work in your own time

  • charge an agreed fixed price for your work

  • sell goods or services to make a profit

Many of these also apply if you own a limited company but you’re not classed as self-employed by HMRC. Instead you’re both an owner and employee of your company.

You can be both employed and self-employed at the same time, for example if you work for an employer during the day and run your own business in the evenings.

You can check whether you’re self-employed:

Selling goods or services

You could be classed as a trader if you sell goods or services. If you’re trading, you’re self-employed.

You’re likely to be trading if you:

  • sell regularly to make a profit

  • make items to sell for profit

  • sell items on a regular basis, either online, at car boot sales or through classified adverts

  • earn commission from selling goods for other people

  • are paid for a service you provide

If you only occasionally sell items or rent out property (for example through auction websites or short-term rental apps), check if you need to tell HMRC about this income.

Contact HMRC for advice if you’re not sure whether you’re trading.

Registering as self-employed

If you’re self-employed, you may need to set up as a sole trader.

Useful Links

Ⓒ Hiclass Accounting 2020

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