As a self-employed subcontractor, you have the freedom to provide your services to multiple clients and work on multiple projects at once. However, becoming a self-employed subcontractor can be a daunting task, especially when it comes to registering with the government. In this article, we`ll guide you through the process of registering as a self-employed subcontractor.
Step 1: Identify your business structure
Before you register as a self-employed subcontractor, it’s important to identify the structure of your business. You can choose to operate as a sole trader or set up a limited company. If you opt for the former, you’ll be personally responsible for any debts your business incurs. On the other hand, setting up a limited company means your business will be a separate legal entity and you’ll only be responsible for the amount of money you’ve invested in the company.
Step 2: Register with HM Revenue and Customs (HMRC)
Once you’ve identified your business structure, the next step is to register with HM Revenue and Customs (HMRC). You’ll need to register for self-assessment by filling out Form CWF1, either online or on paper. You’ll need to provide information on your personal details, the nature of your business, and your expected revenue. Once you’ve registered, HMRC will send you a Unique Taxpayer Reference (UTR) and information about how to file your tax returns.
Step 3: Register for VAT
If you’re earning more than the VAT threshold of £85,000 per year, you’ll need to register for Value Added Tax (VAT). You can register for VAT through HMRC’s online portal or by post. Once you’re registered, you’ll need to charge VAT on your services and submit quarterly VAT returns to HMRC.
Step 4: Consider taking out insurance
As a self-employed subcontractor, you’ll need to consider taking out insurance to protect your business. There are several types of insurance you may need, including professional indemnity insurance, public liability insurance, and employer’s liability insurance. These policies can protect you against claims made by clients and third parties.
Step 5: Keep accurate records
Finally, it’s important to keep accurate records of your business income and expenses. This will make it easier for you to calculate your tax liabilities and submit your tax returns on time. You can use accounting software to keep track of your finances or hire an accountant to do it for you.
In conclusion, registering as a self-employed subcontractor may seem like a daunting task, but the process is relatively straightforward. By following these steps, you can ensure that your business is registered with the government and that you’re meeting your tax obligations.