How to Go Self Employed as a Tradesperson.

Going self employed means running a business as well as doing the trade. Nobody hands you work or takes tax off your pay any more. You find the work, price it, get paid, keep records and put money aside for tax yourself.

The main steps, in order:

1. Check you're ready: work coming in, your real costs known, and savings for quiet spells.
2. Decide how to set up: sole trader or limited company.
3. Choose and check your business name.
4. Tell HMRC (or set up your company at Companies House).
5. Open a separate bank account, and get insurance before your first job.
6. Keep records from your very first job.

• Self employed: working for yourself rather than for an employer. You're responsible for your own tax.
• Sole trader: the simplest way to work for yourself. You are the business.
• Limited company: a business set up as its own legal thing, separate from you.
• HMRC: HM Revenue and Customs, the government department that collects tax.
• Self Assessment: the yearly tax return where a sole trader tells HMRC what they earned.
• Employment status: whether, in the eyes of the law and HMRC, you're really employed or self employed on a job.
• CIS: the Construction Industry Scheme, HMRC's rules for tax on building work done for a contractor.
• Overheads: the costs of running the business that aren't tied to one job, like your van, insurance and phone.
• Making Tax Digital: HMRC's new way of sending your figures through an app or software every 3 months.

It doesn't have to happen overnight. Some people build up work while still employed, as long as their contract allows it.

No. Your tax status depends on how you actually work, not what's written on an invoice. What matters: who controls the work, who takes the money risk, whether you can send someone else in your place, and how much you're part of their business.

This matters most if nearly all your work comes from one contractor. CIS doesn't cover employees, so a contractor has to check your status, and being registered for CIS doesn't settle it either way.

Most small trades start as a sole trader or a limited company. It affects your tax, who's responsible if things go wrong, your paperwork and how you take money out. Don't go limited just because someone says it always saves tax.

1. Pick the right structure.
2. Choose and check your business name.
3. Tell HMRC. As a sole trader, you register for Self Assessment once you earn more than £1,000 in a tax year (6 April to 5 April), by 5 October after that tax year ends. A limited company is set up at Companies House instead.
4. Check whether CIS, VAT, licences or trade registrations apply to you.
5. Keep business money in its own bank account.
6. Get insurance before you take any risks.

Our guide to registering with HMRC walks you through it step by step.

What you charge isn't what you take home. Charging £40 an hour doesn't mean you keep £40. Your price has to cover fuel, travel, tools, the van, insurance, software, bookkeeping, unpaid time quoting, putting things right, tax, pension, holidays, sick days and profit.

Keep a separate pot for tax. It's money waiting for a bill, not spare cash. See how to price your work.

Early work might come from old contacts, friends and family, recommendations, other trades, local Facebook groups and your Google Business Profile (your free listing on Google Maps). Note where each job came from, and which ones were worth it.

Good work, clear communication and asking for honest reviews bring repeat and recommended work. Don't rely on one customer or one website forever.

Look professional from the first enquiry.

• A checked business name and website address
• A business email address
• Clear quotes, terms and invoices
• A website and Google Business Profile when you can
• Quick replies, or a clear plan for missed calls
• The same details on everything

Record money in and out, keep receipts and invoices, check your bank and chase unpaid invoices regularly. Leaving it all until January means mistakes and missing paperwork.

Making Tax Digital: once what comes in each year goes over £50,000 (from April 2026), £30,000 (from April 2027) or £20,000 (from April 2028), you'll keep your records in an app or software and send HMRC an update every 3 months. Starting with good digital habits now makes that easy.

1. Charging too little.Busy doesn't mean profitable.
2. Buying expensive kit too early.Buy for real work and safety, not to look the part.
3. Mixing personal and business money.Keeping them apart makes records and tax far easier.
4. Saying yes to every job.Some work is outside your skills, time, insurance or area.
5. Spending the tax money.Money in the bank isn't the same as profit.
6. Relying on one customer.It's risky, and it can raise questions about your status.