Welcome to Part 2 of my guide, aimed at helping you start self-employment correctly. If you missed Part 1 you can read it here

So far you have registered with HMRC as self-employed, chosen your business name and (hopefully) not annoyed the neighbours if you intend to work from home. What next?

4. Do you need to register for VAT?

If you expect to have turnover of more than £73,000 you will need to register for VAT. The easiest way is by doing it online. If you are a business which primarily offers a service and does not make many purchases, if may be more beneficial for you to register for the Flat Rate Scheme (conditions apply). This can help simplify your accounting process as you pay a set percentage of your turnover as VAT. You can register for VAT voluntarily if you wish.

5. Do you need to register for PAYE?

If you intend to employ other people in your business you will need to make PAYE and NIC payments which will mean you have to operate a Pay As You Earn (PAYE) system. You can learn more about PAYE here

6. Set up a record keeping system

You must document and keep detailed records of all transaction that take place within your business. Even if it is just a folder to store your receipts and invoices in order. If anyone asks you ‘Show me proof of X,Y & Z’ you will be expected to produce the relevant documentation. This blog posting gives you some advice about how to keep your records in order

You’re now up and running as a self-employed sole trade. Come back for the final installment tomorrow to put the finishing touches to your business