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).
How to tell if you're self-employed
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:
- with GOV.UK
- by
Selling goods or services and self-employment
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.
For advice if you're not sure whether you're trading, .
What you need to do if you're self-employed
You'll need to to make sure you pay the correct Income Tax and National Insurance.
You must also follow certain rules on running and naming your business - see 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:
- become a partner in a business partnership - see how to set up a business partnership
- set up your own limited company - see how to set up a limited company
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