Self-employed? You have more rights than you might think — and more tax obligations. This guide covers employment status, IR35, tax returns, National Insurance, and the trading allowance.
Contractor working through your own limited company? Read Am I Inside or Outside IR35? for who decides your status, the Status Determination Statement and how to disagree.
The Supreme Court ruling in Uber v Aslam (2021) means gig economy platform workers can be classified as workers if the platform controls pay, routes and performance. This entitles them to NMW and holiday pay. Check your status.
Employment law recognises three statuses: employee, worker, and self-employed. The label in a contract does not determine your status — courts look at the reality. Key worker indicators: the other party controls when and how you work; you can't send a substitute; they provide equipment. If these apply, you may have NMW, holiday pay and whistleblowing protection.
If self-employed income exceeds £1,000/year, register for Self Assessment at gov.uk by 5 October following the tax year. Pay income tax on profits above your personal allowance, and Class 4 NIC on profits above the threshold. Keep records for up to 5 years after the filing deadline. VAT registration is compulsory at £90,000 taxable turnover.
If you work through a personal service company (your own limited company) but operate like an employee of the end client, IR35 may apply. For medium and large private-sector clients (since April 2021), the client determines your IR35 status. If deemed "inside IR35," tax and NI are deducted at source as if employed. Get specialist tax advice if this applies to you.
Self-employed people don't get holiday pay or Statutory Sick Pay unless they are really workers or employees, and only employees are protected from unfair dismissal. Key steps: written contracts for all engagements; public liability and professional indemnity insurance; detailed income and expense records; emergency savings fund; consider voluntary Class 3 NI to protect your State Pension.
Use HMRC's CEST tool and compare against the reality of how you work. The label doesn't override the law.
Register for Self Assessment by 5 October after the relevant tax year. File online by 31 January.
All invoices, receipts and bank statements. HMRC can ask for 5 years' records.
Wholly and exclusively business expenses reduce taxable profit: tools, business travel, professional subscriptions, home-working proportion.
Being caught inside IR35 without planning creates significant unexpected tax liabilities.
Contact ACAS or the Fair Work Agency. The law overrides the contract label.
HMRC Self Assessment: 0300 200 3310
Citizens Advice: 0800 144 8848
ACAS: 0300 123 1100
Fair Work Agency: gov.uk
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