Jobs & Business
How to Register as Self-Employed in the UK
In the 2013 Doing Business Report issued annually by the World Bank Group, the UK ranked seventh in terms of overall ease of doing business. Nevertheless, if you decide to register as self-employed in the UK, there are still several things to keep in mind. If you are going to be starting a new business in the UK, you’ll need to do your research on the current market there, write a good business plan, and secure enough start-up capital to get your business off the ground. If you are going to be continuing your previous freelance activities, there are still lots of steps you’ll have to take to register as self-employed in the UK.
As a sole trader, you work for yourself and run your own business as an individual. This means that you can keep all the profits you make after paying taxes. It also means that you are personally liable for any financial losses. Sole traders are permitted to hire employees. Make sure to keep good records of anything you buy for your business, as well as all outgoing expenses. You can find more information on how to register as self-employed in the UK as a sole trader on the gov.uk website.
Sole Trader or Limited Company?
Many expats who register as self-employed in the UK set up a private limited company. The advantage for those who choose to incorporate as a limited company is that your business then becomes a legally separate entity, which means that your personal assets will remain protected even if your business fails.
Another thing to take into consideration when making the choice between setting up as a sole trader or a limited company is tax rates. If your profits exceed the higher tax rate threshold, which was set at £41,450 as of April 6, 2013, then it is better from a tax standpoint to register your business as a limited company.
Incorporating a Limited Company
A limited company needs a registered office, at least one director residing in the UK and at least one shareholder. You must register with Companies House and choose a name for your company. You can check if the name you wish to give your company is already taken using the WebCHeck service offered through Companies House.
To help navigate the legal and financial aspects of registering your limited company, you may wish to hire a formation agent. The Companies House website provides a list of Formation & Company Secretarial Agents. Once you have successfully completed the registration process, you will receive a “Certificate of Incorporation”. This document serves as confirmation of the legal existence of your company and includes the company number and date of foundation. You can find more information about incorporating your private limited company, including all the documents necessary for registration, on the gov.uk website.