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Self Employment

If you are considering setting up as a sole trader, a partnership or a member of a limited liability partnership as an individual you must be self employed. You must register with HMRC as self employed within three months of becoming self employed. The following link will take you to form CWF1 for self employment registration.

Being self employed does not prevent you from doing other work as an employee, but the work you do for the business must be done on a self employed basis.

You need to consider if your income is deemed to derive from being employed or self employed. There are a number of tests that can be applied to your situation to determine if you are employed or self employed:

  • Do you provide your customers with an invoice for the work that you do?
  • Do you have multiple customers? Is your income broadly spread across a wide customer base?
  • Are you responsible for the losses made by your business?
  • Do you have ultimate control over the way the work is done, the times when the work is done and where the work is done?
  • Can you substitute other people to do the work that you have undertaken?
  • Have you invested money into the business?
  • Are you responsible for correcting any unsatisfactory work at your expense and in your time?
  • Do you provide equipment or tools that are a necessary requirement to complete the work?

If your answers to the above questions are yes you would probably be deemed to be self employed. If they are no then you would normally be considered as an employee.

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