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
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 items on a regular basis, either online, at car boot sales or through classified adverts
- earn commission from selling goods for other people
- are paid for a service you provide
If you only occasionally sell items or rent out property (for example through auction websites or short-term rental apps), check if you need to tell HMRC about this income.
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.