Easy Steps to Become Self-Employed in the UK

The UK is open to any type of business, such as corporate, small business, and self-employed business. 

In fact, there are 4.26 million self-employed workers in the UK per February 2024. The number of self-employed people in the UK has increased gradually throughout the given period, from 3.2 million at the end of 2000 to over five million at the beginning of 2020.

If you plan to be self-employed, you must understand how to become self-employed in the UK and prepare for the requirements. 

This guide will bring you to explore how to become self-employed in the UK and the details you need to know. 

What Is Considered Self-Employed?

Before we delve into how to become self-employed in the UK, let’s learn the characteristics of self-employment. 

You can be seen as self-employed if you:

• Decide everything about your work, including where, when, and how you work.
• Manage your company on your terms and accept accountability for any achievements or shortcomings.
• Have the option to pay someone to assist you or do the task for you.
• Supply the essential tools needed to complete your task.
• Are in charge of completing any incomplete tasks on your schedule.
• Impose a predetermined, agreed-upon fee on your work.
• Market products or services to generate revenue.

If, for instance, you work for a job during the day and manage your own business at night, you can be both employed and self-employed at the same time.

How to Become Self-Employed in the UK

There are some steps you can take to be a self-employed person in the UK. Below are how to set up as self-employed.

1. Determine the Business Entity

The first step in how to become self-employed in the UK is determining the business entity. Even though you can go with being a sole trader, there are some entities you can choose, such as:

• Sole Trader: Running a business on your own. This entity means you cannot separate your personal and business assets as well as are responsible for any liability. 
• Partnership: Running a business with one or more partners and sharing responsibilities for the business. 
• Private Limited Company (Ltd): Legal entity separated from the owner. This entity must be registered with Companies House. 
• Limited Partnership: Running a business with one limited partner (responsible for the amount they invested) and one general partner (responsible for running the business and the liability).

2. Choose Your Business Name

If you go with being a sole trader, you must pay attention to the naming requirements that you can check on the official website of the UK government.

Here are some requirements you need to fulfil:

• Must not include “Ltd”, “public limited company”, “LLP”, “limited liability partnership”, “limited”, or “plc”.
• Must not be offensive.
• Get permission from the government or local authority if your name contains sensitive words. 
• The name and logo must be available and not be used as a trademark. 
• Register your name as a trademark to prevent other people from using it. 

3. Prepare for the Expenses

The next step in how to become self-employed in the UK is preparing for the expenses. Self-employed expenses include:

• Hiring budgets (if needed).
• Marketing budgets.
• Website setup budgets.
• Equipment and maintenance budgets.
• Vehicles and fuels (if needed).
• Shop rents (if needed).

4. Register Your Business

You might be wondering how to register as self-employed in the UK. Worry no more, below are the steps you need to take to register your business in the UK. 

A. Check Your Business

You must check your business on the HMRC’s Employment Status Checker to see whether you are employed or self-employed. This is to determine the tax you should pay in the future. 

B. Register Online

Next, you can register your business online on the official website of the UK government. You can enter your email address as a starter and you will get a user ID to complete the rest of the steps.

C. Complete the Registration on the Government Gateway

When you get a Government Gateway user ID, you can sign in and complete the registration. You must fill out some information, like the date of business establishment, National Insurance number, address, contacts, types of self-employed, and the type of tax. 

5. Register for Tax

How to pay tax self-employed? You can register for self-assessment on the official website of the UK government and get the National Insurance number if you do not have it. However, if you are a self-employed fisherman, you will undergo different steps of application. 

Not only register for tax, but you may also register for VAT. You must register for VAT if your company's taxable revenue in 2023–2024 was £85,000 or greater. 

As of April 2024, or for the fiscal year 2024–2025, firms must register for VAT at a rate of £90,000. However, some companies with less than this turnover may still find it advantageous to register.

Conclusion

Those are steps on how to become self-employed in the UK. Even though you are establishing your own business, you must prepare all the required documentation so that it can be legal. 

Not only prepare for the requirements, but you must also prepare for how you will market your business. Although you work alone, it does not mean that your marketing strategy is limited. 

You can do anything to boost your business, one of the strategies is using Search Engine Optimization (SEO). 

Yet, doing SEO best practices alone might be troublesome. In this case, you can rely on SEO Services by cmlabs. Our advanced team will help you escalate your business to gain more customers and revenue. 

Tell our Marketing team your needs now and accelerate your business!