Employment - In England

This information applies to England, Wales, Scotland and Northern Ireland

Why become self-employed

There is encouragement from the government for people to become self-employed and at first it seems attractive, especially if you have recently become unemployed or redundant. Although one of the main attractions of becoming self-employed is no longer having to work for somebody else there are several disadvantages you should consider. These include not being certain of having a regular income, having to arrange your own sick pay and pension and probably having to work long hours.

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What kind of business

If you are considering self-employment and do not already have an idea of what you want to do, you could consider something which uses your experience or skills or something which you have previously done as a hobby. As well as the organisations listed in this information (see under heading Who can give further advice) you may be able to get ideas by looking at books and leaflets in the local library or job centre.

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Training

Training in either practical or management skills may be necessary. Training is available from a variety of sources such as courses run by the organisations listed in this information (see under heading Who can give further advice), evening classes at local colleges, books.

See Government employment schemes.

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How to trade

If you are considering self-employment, you will need to discuss with one of the organisations listed under heading Who can give further advice the different ways of trading and which would be most appropriate for your business. The business could take one of three legal forms:-

• a sole trader. This is the simplest way of starting a business
• a partnership. This is similar to a sole trader except that two or more people run the business
• a limited company. This gives the business a completely separate identity from the people who run the business. It is more complicated to set up.

In addition to one of the above legal forms, self-employment can also involve one of the following trading practices:-

• a co-operative. This is a business which is collectively owned and controlled by the people who work in it. At least two people must be involved
• a franchise. A franchise is an agreement which allows the person buying the franchise the right to run a branch of a business that someone else has set up.

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Finance

As a self-employed person, you will need enough money to live on as well as money to start up the business and keep it going. You may be able to get money from the following sources:-

• family or friends
• grants from charities or trusts
• loans from banks and building societies.

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Book-keeping and accounting

It is extremely important that accurate and detailed records of the business are kept. You may be able to keep your own books or employ a bookkeeper or accountant, but if you are trading as a limited company you will need the help of an accountant.

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Income tax

As a self-employed person, you will be responsible for paying income tax on your earnings and will usually need the help of an accountant. There are special tax reliefs and allowances which self-employed people can claim. If you are newly self-employed, you should register with HM Revenue and Customs (HMRC) by calling the helpline for the Newly Self-Employed. The helpline number is: 08459 154515.

You can get more information about income tax for self-employed people from the HMRC website at: www.hmrc.gov.uk.

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Value Added Tax

Value Added Tax (VAT) is a tax on goods and services which is paid to HM Revenue and Customs. Whether or not a self-employed person has to pay, and in some cases has the right to choose to pay, VAT depends on the type of business and how much the business sells.

You can get more information about VAT from the website of HM Revenue and Customs at: www.hmrc.gov.uk.

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Premises

You could consider trading in the following ways:-

• from home. This has the advantage of low costs but you will need to make sure that the tenancy agreement, mortgage agreement or title deeds of the property do not place any restrictions on business use. You may also need to get local authority planning permission
• from premises you have bought or rented. You should consider how much space you need as well as heating, lighting and ventilation requirements. You need to make sure the property has been approved for business use. Planning permission may also be necessary. If you are considering buying or renting premises you should see a solicitor
• from a market stall. The local authority will have details of where and when these are available and how much local markets charge
• at craft fairs. The local authority will be able to give details of where and when these are held.

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Business rates

Business rates have to be paid to the local authority on most business premises. These include shops, offices, warehouses and factories. In some cases, for example, in a property which contains a shop and a flat, or if you work from home, you may have to pay both business rates and council tax. Some types of business premises are exempt from rates, for example, agricultural land. For more information about business rates in England, see the government's Business Link website.

For more information about business rates in Wales, see the website produced jointly by the Valuation Office Agency (VOA) and the Welsh Assembly Government at: www.mybusinessrates.gov.uk.

For more information about business rates in Northern Ireland, see the website of the Land and Property Services at: www.lpsni.gov.uk.

For more about business rates in Scotland, see Non domestic rates – a guide.

For more information in England, Wales and Scotland about council tax, see Council tax.

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Health and safety

As a self-employed person you have a duty to make sure that your business premises and working environment meet health and safety requirements. Further information about health and safety requirements is available from the local health and safety executive or environmental health department of the local authority. In Scotland, local authority refers to the District and Islands Council.

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Insurance

Depending on the business and how you trade, you will be required by law to take out certain types of insurance. Other types of insurance are not compulsory but it is important to consider which ones are appropriate. The types of insurance you may need are:-

• employer’s liability insurance. If you employ other people you must have this insurance. It provides cover for claims made by employees who are injured or become ill as a result of their employment
• vehicles insurance. Vehicles used for business purposes must be insured even if already insured for private use
• public liability insurance. This provides cover against claims by members of the public who have been injured or had property damaged as a result of carelessness at work by you or your employees
• premises insurance. Insurance will be necessary for the premises you work from, even if you work from home and there is already a policy. This is because the insurance will usually only cover residential use
• contents, stock and materials insurance. This insurance will be necessary to cover the replacement costs of stock, materials and the contents of the premises even if is work is being done from home and there is already a home contents insurance policy
• health and accident insurance. These will pay a regular income or lump sum if you are unable to work because of an accident or sickness.

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Pensions

As a self-employed person you will get state retirement pension if you have met the contribution conditions.

For more information about Retirement Pension, see Benefits for people over sixty.

You could also consider getting a private personal pension.

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Immigration status

Setting up in business may affect your immigration status and you should therefore consult an experienced adviser before doing so. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

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Employing other people

If you employ other people you will be responsible for paying wages, tax, national insurance contributions and Working Tax Credit where relevant. You will have to meet the requirements of employment law and health and safety regulations.

For more information on the responsibilities of employers, see Basic rights at work.

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National insurance contributions

As a self-employed person you may have to pay national insurance contributions for yourself and any employees. Whether you have to pay contributions for yourself, and if so what type, depends on how much you earn. Whether contributions have to be paid for any employees depends on what they earn. The payment of contributions will affect the benefits a person can claim in the future. You can contact a telephone helpline for information about national insurance contributions, statutory sick pay and statutory maternity pay on 0845 714 3143.

For more information about national insurance contributions, see National insurance - contributions and benefits.

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Benefits and Tax Credits

As a self-employed person you may be able to claim benefits or tax credits, depending on your income and other circumstances.

To check what benefits or tax credits may be available, see Benefits and tax credits for people in work.

If you are self-employed you should consult an experienced adviser, for example, a Citizens Advice Bureau, for help in working out how much benefit or tax credit you are entitled to. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

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Trading names and licences

You need to consider whether you wish to use a trading name for the business. If so, there are restrictions on the names businesses can use. You may also need to get a licence depending on the type of business. For organisations that can advise on trading names and licences see under heading Who can give further advice.

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Who can give further advice

Banks

All the big banks have sections which specialise in helping small businesses. Most produce free leaflets.

Chambers of Commerce

Chambers of Commerce are local organisations which give information, advice and training to businesses in their town or area. Most give free advice to members, but charge for services to non-members. Some Chambers of Commerce serve particular ethnic minorities.

Enterprise Directorate

The Enterprise Directorate is a government agency providing general information on starting up a small business. It operates the Business Link National Contact Centre, which is a website designed to deliver information and advice to small businesses in the UK - see below. It also operates a helpline for small businesses:-

Tel: 0845 600 9006 (8am-8pm, Mon-Fri)
Minicom: 0845 606 2666
Website: www.businesslink.gov.uk

The Enterprise Directorate operates a network of local providers throughout the UK, which can provide independent and impartial advice. These are provided through Business Link in England (see above), the Flexible Support for Business programme in Wales (see below), Small Business Gateways in Lowland Scotland, Business Information Sources in Highland Scotland and Invest NI for Northern Ireland (see below).

Flexible Support for Business programme in Wales

The Welsh Assembly Government's Flexible Support for Business programme helps and supports people who want to start, maintain or expand a business in Wales. The website is: www.business-support-wales.gov.uk

Invest NI

Bedford Square
Bedford Street
Belfast
BT2 7ES
Tel: 028 9023 9090
Fax: 028 9043 6536
E-mail: info@investni.com
Website: www.investni.com

In Northern Ireland, Invest NI gives general advice, counselling and support to small businesses about setting up a business, trading status, sources of finance, finding premises and preparing a business plan. Grants are also available.

Inbiz (England only)

Enterprise House
8 Yarn Road
Stockton-on-Tees
TS18 3NA
Tel: 01642 610610
Fax: 01642 610611
Helpline: 0800 0321 001
E-mail: info@inbiz.co.uk
Website: www.inbizonline.co.uk

Inbiz provides help and support to long-term unemployed people who want to become self-employed.

Local enterprise agencies (England, Wales and Northern Ireland only)

Local enterprise agencies give free general advice and support to small businesses. Training courses are also available, which are often free. Details of local enterprise agencies are available from the National Federation of Enterprise Agencies - see below.

Northern Ireland

Enterprise Northern Ireland
Workspace
Draperstown
County Derry
Tel: 028 7962 8113
Fax: 028 7962 8973
Email: info@workspace.org.uk
Website: www.workspace.org.uk

National Federation of Enterprise Agencies (England and Wales only)

12 Stephenson Court
Fraser Road
Priory Business Park
Bedford
MK44 3WH
Tel: 01234 831 623
Fax: 01234 831 625
E-mail: enquiries@nfea.com
Website (general): www.nfea.com

NFEA is a network of local enterprise agencies in England and Wales. Its general website has details of how to find your nearest local enterprise agency.

Scottish Enterprise Network

The Scottish Enterprise Network can give details of Local enterprise agencies and provide other assistance.

5 Atlantic Quay
150 Broomielaw
Glasgow
G2 8LU
Tel: 0141 248 2700
Network helpline: 0845 6078787 or 0141 228 2000
E-mail: network.helpline@scotent.co.uk
Website: www.scottish-enterprise.com

Firstport (Scotland only)

Firstport offers free support to people who want to set up a business which will have direct social or environmental benefits. It also administers the Scottish Government's Enterprise Fund.

54 Manor Place
Edinburgh
EH3 7EH
Tel: 0131 220 0511 or 0845 478 6336
Email: info@firstport.org.uk
Website: www.firstport.org.uk

Local authority economic development units

Some local councils have set up units which give advice and help to businesses in their area. Some have bilingual advisers and are intended particularly to help ethnic minority small businesses. They tend to be mainly in inner-city areas. The advisers are employed by the council and will usually have a business background or related skill, such as banking or accountancy.

National Federation of Small Businesses

England and Wales

Sir Frank Whittle Way
Blackpool Business Park
Blackpool
Lancs.
FY4 2FE
Tel: 01253 336 000
Fax: 01253 348 046
Website: www.fsb.org.uk

Scotland

74 Berkeley Street
Glasgow
G3 7DS
Tel: 0141 221 0775
Fax: 0141 221 5954
E-mail: scotland.policy@fsb.org.uk
Website: www.fsb.org.uk

Northern Ireland

Cathedral Chambers
143 Royal Avenue
Belfast
BT1 1FH

The National Federation of Small Businesses is a pressure group which promotes the interests of all self-employed people. There are a number of regional offices and many local branches. There is a subscription fee.

The Federation publishes a free magazine and runs a legal fees and advisory scheme, which provides 24 hour legal advice, and various insurance schemes.

British Franchise Association

A2 Danebrook Court
Oxford Office Village
Langford Lane
Oxford
OX5 1LQ
Tel: 01865 379892
Fax: 01865 379946
E-mail: mailroom@thebfa.org
Website: www.thebfa.org

The British Franchise Association (BFA) is the trade association for franchising companies. It was set up to promote franchising and establish standards. To join, franchising companies have to show that their franchise works and they have to agree to abide by a code of ethics designed to protect franchisees.

The BFA produces an information pack (£29 including postage and packing) for prospective franchisees which includes a list of checks to be made before buying a franchise.

The Prince’s Trust

England and Wales

18 Park Square East,
London
NW1 4LH
Tel: 020 7543 1234
Freephone helpline: 0800 842 842
Fax: 020 7543 1200
Website: www.princes-trust.org.uk

Scotland

Prince’s Scottish Trust
6th Floor
Mercantile Chambers
53 Bothwell Street
Glasgow
G2 6TS
Tel: 0141 248 4999
Fax: 0141 248 4836

Northern Ireland

Midland Building
Whitla Street
Belfast
BT15 1JP
Tel: 028 9074 5454
Fax: 028 9074 4666

The Prince’s Trust helps young unemployed people aged 18-30 to set up their own businesses. In Scotland the age limit is 18-25 only. The Trust can give loans, on-going business advice and help with marketing. The Trust is particularly interested in helping people from ethnic minorities, disabled people and ex-offenders.

LiveWIRE

England and Wales

Livewire
Hawthorn House
Forth Banks
Newcastle-upon-Tyne
NE1 5JG
Tel: 0191 261 5584
Fax: 0191 261 1910
Website: www.shell-livewire.org

Scotland

Duncan Robbie
Shell LiveWIRE
6a Queens Road
Aberdeen
AB15 4ZT
Tel: 01224 626373
E-mail: duncan.robbie@shell-livewire.org

Northern Ireland

Gerry Ford
Shell LiveWIRE Northern Ireland
Belfast
BT3 9EU
Tel: 028 9055 3802
E-mail: gerry.ford@shell-livewire.ie

Livewire is a national scheme sponsored by Shell, to help young people aged 16-30 to set up in business. Young people with projects can discuss their ideas with local advisers and financial awards may be given. There is usually a closing date for the scheme each year. Each entrant to the scheme will be paired to an adviser who will help them on an individual basis to plan and develop their business idea.

Co-operatives UK

Holyoake House
Hanover Street
Manchester
N60 OAS
Tel: 0161 246 2900
Fax: 0161 831 7684
E-mail: info@cooperatives-uk.coop
Website: www.cooperatives-uk.coop

Co-operatives UK is the central organisation for co-operative enterprises in the UK. It is member owned and led, and works to represent the interests of its member co-operatives. It provides a wide range of support services to its members.

The Business Institute

Enterprise House
University of Ulster at Jordanstown
Shore Road
Newtownabbey
BT37 OQB
Tel: 028 9036 5060
Fax: 028 9036 5117
Website: www.business.ulst.ac.uk/businst

The Northern Ireland Small Business Institute (NISBI) is a general resource and expertise centre for small businesses, co-operatives and community enterprises. It provides counselling and business advice.

NORIBIC Business Innovation Centre (Northern Ireland only)

Northland Building
NWIFHE
Strand Road
Derry
BT48 7AL
Tel: 028 7126 4242
Fax: 028 7137 2294
E-mail: info@noribic.com
Website: www.noribic.com

The NORIBIC Business Innovation Centre provides help for

new businesses throughout N. Ireland in evaluating projects, preparing business plans for small businesses, finding premises, arranging finance, grants and subsidies, and finding new business ideas. It can also give advice on new technology.

Brecon Business Centre (Wales only)

61 Brecon Business Centre
Market Approach
Brecon
Powys
LD3 7DA
Tel: 01874 610 054
Fax: 01874 610 794

Brecon Business Centre is responsible for the economic and social development of mid-Wales. It provides advice and support to small businesses, including advice about setting up in business, preparing a business plan, advising on whether the business idea is viable and can help investigate sources of money, find suitable premises and set up financial control systems, for example, book-keeping. It runs training courses, and provides advice locally through a number of Business Centres.

Rural Development Council (Northern Ireland only)

17 Loy Street
Cookstown
County Tyrone
BT80 8PZ
Tel: 028 8676 6980
Fax: 028 8676 9922
E-mail: info@rdc.org.uk
Website: www.rdc.org.uk

Equality direct (England only)

Equality direct runs a free, confidential advice line for employers. It provides advice and information on equality issues and general people management. The advice line number is 0845 600 3444. There is also a website at www.equalitydirect.org.uk.

Learndirect Scotland for business (Scotland only)

PO Box 25249
Glasgow
G3 8ZS
Tel: 0845 6000111
E-mail: info@lds4b.com
Website: www.lds4b.com

Learndirect Scotland for business is a service that helps businesses identify appropriate training. The service is backed by the Scottish Government and is staffed by expert advisers using a national learning database.

Disabled Entrepreneurs Network (England and Scotland only)

Website: www.disabled-entrepreneurs.net

The Disabled Entrepreneurs Network is a regional networking service for disabled people. It provides advice and support for disabled people who run their own business or who want to set up in business.

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