1. Register As Self-Employed With HMRC
To start working as self-employed, you must register with HMRC, which you can do at any time up to 5 October of your business second tax year.
How you register your self-employed status with HMRC depends on your own particular circumstances, so if you need advice or if you are unsure whether or not you need to register with HMRC, don’t hesitate to contact us.
2. Complete Self-Assessment Tax Return
When working as self-employed, you have the responsibility of calculating the amount of tax you need to pay and completing a Self Assessment Tax Return every year.
In practice, most small business owners will hire us to prepare accounts and calculate the amount of tax to pay to ensure they get it right.
3. Confirm If You Need To Register For VAT
If your business has an annual turnover of £85,000 or more, you must register for VAT.
The threshold usually rises by a few thousand each year, so it’s important to ensure you inform HMRC within 30 days, or risk paying a fine.
4. Open A Business Bank Account
As a sole trader, although your business income will be taxed alongside your personal tax, it is vital to keep your business records and finances separate from your personal activity.
For this reason, we recommend you open a separate business bank account, such as Starling, Monzo or Mettle.
5. Make Sure You Are Properly Insured
As a business owner, you must comply with legal (or contractual) requirements to have certain insurance policies in place, and you may also want to consider optional insurance coverages for added peace of mind.
If you employ another person, even if it is only an occasional part-timer, you are legally required to take out employers liability insurance.
You need at least £5 million of cover (which is standard) and you must display your certificate of insurance where employees can easily read it. You can expect a very heavy fine for failing to have a policy in place.
If you provide any type of professional service or advice to clients, you should also consider taking out a professional indemnity policy. It will cover you if a client sues you because they are unhappy with the work you have done, or advice you have given.
6. Keep Accurate And Up-To-Date Financial Records
To be a successful sole trader, you must keep on top of your books.
You are obliged to keep clear and accurate records of all your business transactions from the start. Keeping such records will ensure that you keep the tax authorities happy, and it will be much easier to operate your business if you are organised and keep your paperwork constantly updated.
At Coach Accounts we handle this for you and complete your annual self-assessment tax return quickly and efficiently – giving you more time to work on your business.
Choosing the right legal structure is a critical part of running a successful coaching business.
If you are thinking of starting a personal training or coaching business, working out whether to go self employed or to set up a limited company is one of the first big decisions you have to make.
Contact us for a no-obligation / no-catch chat to understand your needs and setup your coaching business for success.