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SELF EMPOYMENT

Self empoyment can mean working as a sole trader, partnesrship or a member of a limited liability partnership. Setting up as a self-employed sole trader is the simplest and quickest way to start a one-person business. There isn't much paperwork to do. There are no registration fees to pay, but you must register as self-employed with HM Revenue and Customs.

Record keeping and accounting is straightforward, and there are the benefits of being your own boss. Matthews Hanton can give you the guidance needed before you start trading.

Anyone can set up in business as a sole trader, although for certain types of work you may need a licence or permission from your local authority. Restaurants, childminders, cab drivers and street traders, for example, all need to have a local authority licence. Your qualifications and business premises may be inspected beforehand to ensure you comply with regulations.

If you run a business from home, you may have to pay business rates for the part of your home that you use for your business. This mainly depends on whether the business area of your home is also used for domestic purposes. If you simply work on a computer in a bedroom, for example, you will probably not have to pay business rates, but consider that there may be restrictions in the deeds of your property or, if you rent, in the rental or lease agreement.

You can trade under your own name, eg M.Y.Self, or use another business name, eg Peerless Promotions, but you cannot use “Limited” in the title unless you form a limited company (see the Limited Company page on this website).

If you decide to use a business name, you must make sure that your business stationery displays your name as well as the trading name of the business for example, M.Y.Self, trading as Peerless Promotions. Your trading name should not be the same as - or too similar - to that of a business that already exists. Be careful that it does not contain words that people might find offensive or misleading.

In a partnership, two or more people share the risks, costs, and responsibilities of being in business. Each partner is self-employed and takes a share of the profits. Usually, each partner shares in the decision-making and is personally responsible for any debts that the business runs up.

Unlike a limited company, a partnership has no legal existence distinct from the partners themselves. If one of the partners resigns dies or goes bankrupt, the partnership must be dissolved but the business may not need to cease. Each partner must register as self employed as well as the partnership itself.

Every self employed person must make an annual self assessment tax return to HM Revenue and Customs. We offer this service to all our clients.