This is a common, low cost, way of operating a business, popular with plumbers, taxi drivers, builders etc. This will entail registering as self-employed with HMRC using a CWF1 form and paying Class 2 National Insurance contributions, usually by direct debit.
Legally, there is no difference between the owner's personal and business affairs, so this should be considered when thinking about taxation and legal liability issues. An important aspect is that the owner is taxed on all the profits, even if some are re-invested in the business.
Be aware that even if this method is what you would like, your clients or agency may not be prepared to engage you on this basis. This is because if your self-employed status is challenged they could become liable for any extra tax and NIC liabilities that may be due.
The Income Tax (Earnings and Pensions) Act 2003 Section 44 effectively prevents individuals from trading as sole trader where an agency is involved, as it obliges the agency to treat the individual as if they were an employee, and so are required to deduct PAYE and NIC from any payments due.
Please refer to our separate Sole Trader Guide for more details.
Our charge for this service is £95 + VAT per month.