5. What You Absolutely Have To Do

The one thing you have to do when you start up business is to let the tax authorities know. If you are working freelance, clients might need to see evidence of your self-employed status before they take you on, so they can be sure they will not be held liable for your National Insurance contributions.

If you are setting up as a sole trader, you will need to notify your local tax office in order to get a Schedule D number. To find out more, contact your local tax office. They are listed in the phone book and they will also tell you how to pay Class 2 National Insurance Contributions.

• Your tax office can also advise you on what to do if you set up a partnership.
• If you are setting up a company, you will need to notify Companies House. You can find out more from the Companies House website, www.companieshouse.co.uk.
• If you expect to earn more than around £ 64,000 a year, you will need to register for VAT. You do this with Her Majesty’s Revenue and Customs. Again, details of your nearest office can be found in the phone book, under ‘VAT’.

Unless you want to do your own accounts, you might also want to appoint an accountant for your business. You will not need them to do any work at the beginning, but they can provide valuable help and advice on starting out. To find an accountant, ask other self-employed people or small businesses for recommendations, if possible. Otherwise, you could look for someone local in the Yellow Pages.

You might want to speak to a few prospective advisers before you choose one. Ask for a written quote of their rates. These can vary widely, but should not really be more than a few hundred pounds for the preparation of one year’s accounts and a tax return, if you have got good bookkeeping records. Also, check to see if they have experience in your area of business.