Being self-employed in the UK has a lot of benefits and is recommended if you feel like you have the potential to run your own business. Here is how to become successful, what you need to sort out before starting your company, and some of the most frequent questions.
Sort your taxes
Being self-employed means paying taxes as well as your National Insurance. Everyone can do this but only up to 5 October of your business’ second tax year.
The tax year starts on April 6 and lasts till the 5 of April of the following year.
You will need to calculate on your own how much tax you need to pay, or you can higher an accountant to do this for you. Nowadays there are also some online accountants which may be a bit more affordable.
What is NICs?
NICs stands for National Instant Criminal Background Check System which checks a person’s background to see if they are eligable to start their own business.
You should pay £2.95 a week for the 2018/19 tax year. Only those business which make less £6,205 in the 2018/19 tax year will not have to pay for the NI contributions.
If you are self-employed you will also need to pay the 4 NICs. For the 2018/19 tax year, this is 9% on your annual profits which you make anywhere between £8,424 and £46,350.
What is VAT?
VAT stands for value-added tax and is something which you should register if your business makes more than £85,000 annually.
Should you open a business bank account?
Try to keep your business records and finances separate from any personal affairs. Try and open a business bank account where you will pay around £6-£10/month.
Do I need insurance?
You are actually obligated by law to have an insurance policy. The fees will be different depending on the type of business you are, so it is different for everyone.
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