Self Employment for the first time can be intimidating – lets look at the real basics
Business Structure
A business needs to operate in a structure. For most people this will be as a Sole Trader, and this guide reflects that. A Sole Trader is the simplest form of business structure, suitable for anyone starting out running a small business with no unusual risk factors.
In most instances there is no merit in establishing a Limited Company at the outset.
Read more about Business Structures, and What is Appropriate for You
Registration
For someone starting as a Sole Trader, for tax purposes you need to register with HMRC for Self Assessment / Self Employment. The only exception is if your turnover is less than £1,000 a year.
The time limit for doing this is 5th October after the end of your first tax year. Eg if you started trading in the 2024/25 tax year (UK tax years run till 5th April annually), then you must register by 5th October 2025. There’s nothing to lose in registering earlier.
Register on HMRC website
Read more about Registering with HMRC
Property and Trading Income Allowance – £1,000 Exception for small turnovers
As a sole trader your only other legal registration requirement is with the Information Commissioners Office for Data Protection
Important – you do not have to register a business name (unless you are incorporating a limited company). There are many scams operating around business name registration, but there is no requirement. Of course, you may want to register a business domain name – that is a separate process.
Read more about Trading Names
Record Keeping
You need to keep records of income and expenses for tax purposes. A spreadsheet will do the job for now, although from 2026 its going to be mandatory for most businesses to digitise their processes for Making Tax Digital either by using an App – we recommend FreeAgent – or a spreadsheet connected to HMRC via Bridging Software.
There is a spreadsheet template on our website, along with guidance on expenses and record keeping:
Spreadsheet Template for Yoga Teachers
Record Keeping
Expenses – What can you claim against tax
Filing and Paying Taxes
You have to file a Self Assessment return for each tax year. A tax year runs 6th April to 5th April, and you need to file and pay by the following 31st January – eg:
- 2024-25 tax year
- Filing covers 6th April 2025 to 5th April 2025
- File and Pay taxes by 31 January 2026
You can file your own Self Assessment on line, or get a friendly accountant to help you.
Theres lots of guidance around Self Assessment on our Website
A common question is around having a part time job alongside Self Employment – here is a guide
Other Legalities
Here is a check-list of some other things to think about – Insurance, Data Protection, First Aid, Health and Safety, and more.
A Couple of Things You Do Not Need To Worry About
If you are just starting out, normally you do not need to worry about
- Registering a business name – other than registering your domains and social media accounts
- Registering a company – you just register for Self Assessment as a Sole Trader with HMRC
- Registering for VAT – you don’t have to register until your rolling twelve month turnover goes over £85,000
Other Help and Guidance
On our website is a selection of help sheets – about 70 in total – on a range of topics. If you’ve thought about it, hopefully we have as well
Help and Guidance
We’re always willing to help with a simple query – get in touch by email.
And if you would like professional help with your taxes, please visit our Fees and Services page to see how we can help.
