This really depends on how much you’re earning. The higher your profits, the more likely it is that operating a limited company will save you money on tax because sole traders pay 20-45% income tax on their profits, whereas limited companies pay 19-25% in corporation tax.

If you’re just starting out it may be cheaper (and easier) to run a sole trader business – but you can always change your business structure when it’s no longer tax-efficient to operate as such.

To make your life much easier - we have our own trusty calculator to help you work out whether it’s more tax-efficient to be a sole trader or limited company. If you need further advice we have a blog that’ll help.

Becoming self employed can be extremely overwhelming. You need to consider how much everything will cost, which business structure you want to choose (as being self employed isn’t actually a legal business structure) and how much you should charge.

Don’t panic! We have a beginner’s guide to self employment that will explain all the initial steps.

If you’re a sole trader or in a business partnership, you may come to a point in time where you’d like to incorporate to a limited company. This involves:

• Choosing a company name


• Selecting a start date


• Notifying both Companies House and HMRC


• Appointing a director


• Paying a setup fee

It also involves various other tasks such as notifying suppliers and opening a business bank account (if you don’t have one already). We have a complete guide on incorporating a limited company which talks you through the process.

You can claim anything used wholly and exclusively in your business. This can include uniforms, training courses and even fancy-dress costumes.

Read our guide on claiming business expenses when you’re self-employed for more.

Once you’ve submitted your Self Assessment, HMRC will calculate exactly how much tax you owe. You can then sign into your Government Gateway account and pay your tax bill online.

There are other ways to pay too, for example over the phone or through your tax code. Read our blog on how to pay your Self Assessment tax bill for more information.

You can be a sole trader, and work in employment (unless it states differently in your employment contract). You can also, in some instances, pay your self-employed taxes through your PAYE tax code.

This depends on the business structure you choose. As for expenses, you can claim for anything ‘wholly and exclusively’ used for your business.

Don’t panic! We have an entire Uber guide on paying taxes (and choosing a legal business structure), as well as a list of different types of expenses you could claim.

Yes – you’ll still need to submit your Self Assessment if HMRC are expecting one from you. If you don’t submit one, you may be hit with a penalty. You can get in touch with HMRC in advance if you think you no longer need to submit one.

Read our complete guide on submitting a tax return when you don’t make a profit.

We understand this is tough, whatever the circumstances. To help, we have a blog on closing down your company. It explains how to close down a limited company, based on whether your company is solvent or insolvent.

You need to register for VAT if your taxable turnover reaches the threshold (from April 1st 2024 this will be £90,000). There are exceptions, for example, if your business only sells VAT exempt products or services.

We have a complete guide to VAT registration here.

If you reach the VAT threshold (and you aren’t exempt), you must register.

If you separate your businesses in two just to avoid paying VAT, this is called ‘disaggregation’, also known as artificial separation. So basically, to HMRC it’s tax avoidance!

This isn’t always the case, and you may have a genuine reason to split up your business – we have a guide on disaggregation that’ll help.

From April 1st, 2024, the VAT threshold will change from £85,000 to £90,000. This means you’ll be able to deregister from VAT if your taxable turnover consistently falls under £88,000.

You may no longer be eligible for VAT, for example, you’ve stopped trading or making VAT taxable supplies – in this instance if you’re no longer eligible for VAT anymore you must cancel within 30 days, or you could be charged a penalty.

We have advice on how to cancel your VAT registration here.

If you’re simply decluttering your wardrobe, you’ll likely be known as an ‘ordinary seller’ meaning you won’t need to inform HMRC or pay taxes. If you’re reselling things online with an intent to make a profit (and it’s become a second source of regular income) you may be classed as an ‘online trader’ and this is when your earnings may be sent to HMRC for them to review and where (in some instances) you’ll need to pay tax.

The reporting rules mean Vinted will notify HMRC if you have more than 30 transactions, but this doesn’t always mean you’ll need to register for Self Assessment or pay tax. Check out our guide on selling old clothes online.

Once you’ve earned over the trading allowance (which is currently £1,000) in a tax year, you’ll need to decide on a legal business structure. This will affect the amount of tax you pay, how you pay it and even how you register with HMRC when it’s time to let them know about your business.

We have a guide on choosing a legal structure for your business to help you make this decision.

If you’d like to chat to one of our expert accountants – you can book a call without being a client. A consultation with an Accounts-Semi-Senior is £90 excluding VAT, and one with an Accounts Senior is £120 excluding VAT.

If you love the service we provide and would like us to be your accountants, the consultation cost will be deducted off your first year’s fee!

Yes you can get an instant quote by clicking the link – easy!