Do you need an employment contract if you’re self employed?

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No you cannot employ yourself, you may however employ others who will need employment contracts.

When should you register as self-employed?

You should register as self-employed if:

  • You earned more than £1000 from you self-employment between 6 April 2020 and 5 April 2021
  • 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

You’re probably self-employed if you:

  • Work for yourself
  • Are responsible for your own success
  • Decide how, where and when you work 
  • Hire people at your own expense 
  • Have your own equipment to work 
  • Sell goods or services to make profit.

How much do you have to make to be considered self-employed?

You should register as self-employed if you earned more than £1000 from you self-employment between 6 April 2020 and 5 April 2021.

How do you set yourself up as self-employed?

If you are self-employed, you may set up as a sole trader. After paying tax on business profits, you may retain the proceeds. You will be responsible for any losses and must comply with rules around running and naming the business. 

 

To set up as a sole trader you need to tell the HMRC that you pay tax through self assessment and you’ll need to file a tax return every year. To register for a self assessment click here.

How do I prove I'm self-employed in the UK?

You’re probably self-employed if you work for yourself, decide how, where and when you work, hire people at your own expense, have your own equipment to work and sell goods or services to make profit.

If you’re self employed you should keep records of:

 

  • Sales and income
  • Business expenses
  • VAT records (if you’re registered for VAT)
  • PAYE records (if you pay people)
  • Records about your personal income

 

It is important to keep records of your business income and expenses alongside personal income for your HMRC self-assessment tax return if you’re self-employed. You will also need to choose an accounting method either 1) traditional accounting or 2) cash basis accounting, further information can be found here.  

In order to prove your self-employed status you can provide evidence of: 

  • You personal tax calculation from the HMRC
  • Self-assessment tax return 
  • Statement of self-employed accounts
  • A letter from your accountant confirming self-employed status

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