Considerations for becoming self-employed for the first time in the UK

Becoming self-employed for the first time offers an exciting journey of self-discovery, but it also requires determination and hard work. Having your own business can be incredibly rewarding and excellent for personal growth.

If you’ve had a business idea in the pipeline for a while now or want to take your side hustle to the next level, we’ve created this guide featuring tips and considerations for when you take that next step.

The advantages and disadvantages of going self-employed


Advantages Disadvantages
You are your own boss, this means you make the rules, such as what time you work and where. You’ll need to do all the legwork when it comes to gaining new clients.
You can enjoy complete flexibility, with the ability to create a schedule that works around you and your family. You will need to invest initially in the business, so you may need to save up funds or take on a business loan to get started – and then pay this back.
You choose the jobs you do, so you can enjoy more varied work or take on jobs that you feel are best suited to you and your skills. You’ll need to file your own tax returns, which can prove complicated for some people.
You can claim back for your costs, such as travel and some utilities that you use if you work from home. Being self-employed can make it difficult to rent a property or get a mortgage, as you don’t have a guaranteed income.
You can save time because you don’t have to commute. You may have quiet periods and will need to prepare accordingly for these times when there is no regular work.
You may enjoy more time with family as you work from home. You are not paid if you take holiday or are sick.  
You could potentially earn more money, especially if you’re working in a consultancy based role. You may find it isolating working from home alone.


What to think about before going self-employed

Below, you’ll find a few things to consider before taking the plunge:

  1. What are you offering? Do you fully understand what your service or product is, how to manage it and how you intend on providing it to customers?
  2. Do you have a plan for gaining clients or customers? Have you considered marketing yourself, will it be via word of mouth, social media, paid ads?
  3. Where will people find information about your business? Are you creating a website, solely setting up on social media or encouraging people to spread the word about you?
  4. Where will you work? Are you going to create an office space at home to work from or do you need a workshop or place to rent?
  5. Are you happy to work alone? When you first start out, you’ll likely be the only employee in your business, can you handle being alone for long periods and only having yourself to come up with ideas or solve problems.
  6. Have you thought about your pension? Will you save money in a dedicated pension fund or via a savings account?
  7. Can you deal with any periods of little or no income? Sometimes clients or customers go cold or you’ll have slow periods, in this case are you able to cope with less income? Do you have a plan?
  8. Do you have any money to set up your business? Will you need to use savings, investments or a business loan to set up your business? What you choose can make a difference.


What to do when going self-employed for the first time in the UK

Here we have created a quick checklist to help you get your ducks in a row when going self-employed for the first time.

1.   Notify HMRC

One of the most important things you’ll need to do when going self-employed is to sort out your tax situation. You’ll need to let HMRC know that you’ve gone self-employed to ensure your tax is calculated correctly.

How to pay tax as a sole trader

A sole trader will need to pay tax through self-assessment. You’ll need to register on the Government’s website – gov.uk.

Once you’ve registered you’ll receive more details by post and then you’ll need to complete your registration using your assigned Government Gateway details and provide more information about your business. Once you’re set-up, you’ll then need to complete a self-assessment tax return each year.

How to pay tax if you’ve set up as a limited company

If you’ve set up a limited company, you’ll pay corporation tax on your profits, not income tax on what you earn. You can click here to pay a corporation tax bill but your account will be set up during your process setting up your limited company.


2.   Set up a space to work and store stock

Whether it’s the dining room table or renting out an office space, it’s important you find somewhere to work that allows you to focus and be as productive as possible.

If you’re selling a tangible product, rather than a service, you’ll need somewhere safe to store stock. A storage unit could be a great solution, offering a dry and clean space for those important products. Take a look at what Cubic Storage can offer those who are self-employed when it comes to a dedicated space for stock in one of our units.


3.   Consider your marketing

When starting out self-employed, it’s important you consider how to market your business to ensure those potential customers or clients learn about what you offer. Here are just a few options to think about:

  • Social media – Set up a social media account on a platform your target customers are likely to be using. Facebook is perhaps the easiest to set up and use, people can find out more about your business and get in contact with you.
  • Leaflets – Traditional marketing still works, especially if you’re targeting a local audience. Get leaflets printed and go door to door, posting them through letterboxes or leave them in local businesses.
  • SEO – Work on your website and ensure the content on this is fit for purpose to ensure your site ranks for terms your customers are likely searching for.
  • Encourage people to leave reviews – Nothing encourages more future custom than glowing reviews on your website or social media.


4.   Make a list of what you can claim for

There are a number of things you can claim back for, while self-employed, to help you better manage your income and ensure you are profitable in the future. Check out our roundup below of allowable expenses that you can claim back for when self-employed.

Office supplies and expenses – You can claim back for items such as business stationery, postage and necessary equipment such as computers, printers and even software. You can also claim back the costs associated with your office space such as utility bills, insurance, security and any maintenance or repair bills.

Stock or materials – You can claim back for the cost of stock, materials for any products you create or to support services you offer.

Travel – If you need to travel for your job, you can claim back for fuel, servicing, breakdown cover, repairs and insurance.

Marketing – If you’ve paid out for leaflets to be made or perhaps a newspaper advert you can claim these back. The costs associated with creating a website and paid for ads online can also be claimed back for.

Insurance – As a business, you must have insurance but you can claim back for the cost of this when self-employed. Whether it’s insurance for your business premises or public liability insurance these can be covered.


5.   Come up with a system for tracking expenses and work

It’s important that you are organised when you go self-employed. You will likely be the only person handling your accounts and projects, so you need to find a way of keeping track of everything from what job you have booked on which day to where you’ve spent money on your business.

Find a secure place to store receipts and paperwork that are easy to look through to find what you need and ensure you set deadlines for yourself when it comes to processing these and claiming back for expenses.


6.   Think about your pension

As a self-employed individual, you won’t have an employer who is obliged to put money into a pension fund for you and so will need to do this yourself. You’ll still be entitled to the State Pension when you retire but it’s also worth looking into another means of putting money away for when you stop working to ensure you’re covered. The Money Advice Service has an excellent guide here to self-employed pensions with a round-up of options to consider.


If you decide to take on the exciting journey of becoming self-employed, take on these considerations above to try and make your move to being your own boss a little smoother. If you need storage space, to keep stock safe or documents out of the way, get in touch with Cubic Storage to discuss your options.

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