Set up as a sole trader

If you’re a sole trader, you run your own business as an individual and are self-employed.

You can keep all your business’s profits after you’ve paid tax on them. You’re personally responsible for any losses your business makes. You must also follow certain rules on running and naming your business.

Check what counts as self-employed if you’re not sure about your status.

How to register

You need to set up as a sole trader if any of the following apply:

  • you earned more than £1,000 from self-employment between 6 April 2017 and 5 April 2018
  • you need to prove you’re self-employed, for example to claim Tax-Free Childcare
  • you want to make voluntary Class 2 National Insurance payments to help you qualify for benefits

To set up as a sole trader, register for Self Assessment and file a tax return every year.

Your responsibilities

You’ll need to:

You’ll need to apply for a National Insurance number if you’re moving to the UK to set up a business.

VAT

You must register for VAT if your turnover is over £85,000. You can register voluntarily if it suits your business, for example if you sell to other VAT-registered businesses and want to reclaim the VAT.

Working in construction industry

Register with HMRC for the Construction Industry Scheme (CIS) if you’re working in the construction industry as a subcontractor or contractor.

Naming your business

You can trade under your own name, or you can choose another name for your business. You don’t need to register your name.

You must include your name and business name (if you have one) on official paperwork, for example invoices and letters.

Business names

Sole trader names must not:

  • include ‘limited’, ‘Ltd’, ‘limited liability partnership’, ‘LLP’, ‘public limited company’ or ‘plc’
  • be offensive
  • be the same as an existing trade mark

Your name also can’t contain a ‘sensitive’ word or expression, or suggest a connection with government or local authorities, unless you get permission.

Example To use ‘Accredited’ in your company’s name, you need permission from the Department for Business, Energy and Industrial Strategy (BEIS).

Check which words you need permission to use, and who from.

You’ll need to register your name as a trade mark if you want to stop people from trading under your business name.

Help and support

You can sign up for business support emails from HMRC to help you if you’re working for yourself.

  1. Step 1 Check if you can become an instructor

  2. Step 2 Apply to become a driving instructor

    You must get a new Disclosure and Barring Service (DBS) check to start your application, even if you already have one.

    1. Get a DBS check £6
    2. Start your application
  3. Step 3 Get a trainer

    Get a registered trainer to help you prepare for the 3 qualifying tests.

    1. Find driving instructor training courses
  4. Step 4 Take the theory test (ADI part 1)

    1. Revise and practise for your test
    2. What you need for your test
    3. Find a theory test centre
    4. Book your test £81

    Once you've passed the theory test, you must pass the other parts of the test within 2 years or you'll have to start the whole process again.

  5. Step 5 Take the driving ability test (ADI part 2)

  6. Step 6 Get practice teaching

    If you’ve passed ADI part 2 you have the option to apply for a 6 month trainee licence to get experience teaching students.

    1. Find out about trainee instructor licences
    2. Apply for a trainee instructor licence £140
  7. Step 7 Take the instructional ability test (ADI part 3)

  8. Step 8 Register and start working as an instructor

    Once you've passed the tests you must register within 12 months.

    1. Register for your first ADI certificate £300

    When you have your certificate you can start charging for lessons. You can either:

    You'll have at least one standards check every 4 years. You also need to renew your registration and get a new DBS check every 4 years.

    1. Find out about ADI standards checks
    2. Renew your registration £300
    3. Improve your skills as an instructor