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 (including through websites or apps)

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 online, at car boot sales or through classified adverts on a regular basis
  • earn commission from selling goods for other people
  • are paid for a service you provide

You’re probably not trading if you sell some unwanted items occasionally or you don’t plan to make a profit. You can’t use any losses you make as part of a hobby to reduce your tax bill.

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.

Other ways to work for yourself

There are other business structures apart from being a sole trader. For example, you can:

Get help with your business

You can get help with setting up or growing your business, for example with funding your idea.

  1. Step 1 Check if being self-employed is right for you

  2. Step 2 Choose the name you want to trade under

    1. Check the rules for sole trader business names

    You can register a trade mark if you want to stop people from trading under your business name.

    1. Apply to register a trade mark
  3. Step 3 Check what records you'll need to keep

  4. Step 4 Register for tax

    To pay tax, you'll need to register for Self Assessment.

    1. Apply for a National Insurance number if you do not have one
    2. Register for Self Assessment

    You might need to register in a different way if:

    You may also need to register for VAT.

    1. Check if you need to register for VAT