Self-Employed in Scotland (and the rest of UK)

Become Self-Employed

What it means to become self-employed in Scotland

The British government encourages people to become self- employed and it may be a good idea to do so and start your own business, especially when you are unemployed or are about to lose your salaried job. Also, working for yourself has an important attraction.

If you are considering doing so, we must take into account the advantages and disadvantages of this process, because many times we ignore what truly involves being self-employed/ autonomous.

It is usually a good idea if you are an entrepreneur and you have thought of an idea for a business, where you would be responsible for your own work or even someone else. For this you can establish yourself as sole trader (link) or even get to form a small partnership –partnerships or limited Company – depending on the number of people who are involved in the idea of the business.

Sole trader – is the simplest way to start a business

Partnership – Similar to the shape of the sole trader, ideal for small groups (2 to 4 or 5 people)

Limited Company – This form establishes a business identity (at the time of fees, etc.) totally independent of the people who carry it. But becoming a Limited Company is rather complicated.

In addition to the legal forms mentioned above, you can also establish cooperatives (this business property corresponds to several people) or a franchise (where another type of legal relationship is established since the entrepreneur would buy the right of the franchise and thus establish another type of legal relationship)

Things to keep in mind

When a person enrols as autonomous (self-employed), you have to consider who will be responsible for these payments:

First you need to register as an autonomous with the Inland Revenue (HM Revenue), you can do it online here: = & Location = 40 & origin = http: //

More information:  or call the HMRC Newly Self-Employed Helpline: 0300 200 3504.

It is always important to keep an accounting book, as well as transparency in the monitoring of expenses and profits (sometimes an accountant can help in these aspects) since your accounts may be required when making your declaration of autonomous Inland Revenue, normally on January 31 of each year. Sometimes depending on the nature of the business, they can be every 6 months,

  • Income Tax: Normally you have to pay this tax depending on your earnings and sometimes you need the help of an accountant for this purpose. There are tax relief and subsidies (tax allowances) that can be ordered.
  • VAT / VAT: Depending on if the nature of your business is trade and services, sometimes you have to pay VAT (Value Added Tax), depending on the profits. For more information:
  • Contributions to the National Insurance: These will be your contributions to have access to health care and constitute the contribution to the welfare society from where the benefits are derived.

It is important to pay National Insurance contributions whether you are self-employed or sole trader or if there is more than one person in the business. The type of contribution and the amount will depend on the winnings.

More information on these contributions: CAB website

  • Pensions: In order to contribute to state pensions you will have to consider whether you are eligible to contribute, but if you comply with them, it is advisable to pay for the state pension as it is transferable to any state in the EU and joins other state pension schemes Passed as futures.
  • Insurance: Depending on the nature of your business, the law requires you to have certain insurance policies, but not all those in the market are mandatory.

If you have employees: employer’s liability insurance

If you use your vehicle as part of the business: vehicles insurance for business purposes

If you work in public places, where accidents or damages may occur: public liability insurance.

For your place of business: premises insurance and contents, stock and materials insurance.

To cover possible accidents: health and accident insurance.

Other expenses or contributions:


For those who are not part of the free movement for EU nationals, becoming autonomous can affect your immigration status and it is advisable to seek help or specialized advice.

Source: CAB