What does mean to be self-employed in UK?

Folks, please, advice if you know :

What does mean to be self-employed in UK from legal and tax perspectives? If I want to make money on Internet officially, should I  register my company or I can go as a contractor with a Web site (the money will be paid by firms , not by individuals)?

Cheers,
- Michael_P

1)  You are self-employed if you earn income from the fruits of your labour and do not have employee taxes withheld from this labour.
2)  What you are describing definitely falls under the category of self-employment.
3)  Making a decision as to whether or not to incorporate has legal and tax repercussions.  If I were you, I'd do this as a discussion with a dual-qualified tax professional rather than a random one-sentence post on an internet forum.  The give-and-take afforded by such a conversation is irreplaceable in extent and quality.

Thank you, Liz. I have found several sources on the net for starting small business and for official interpretation (there is no official definition) of self-employment. Just in case, here it is

http://www.hmrc.gov.uk/employment-status/index.htm#1

There are essentially, in the UK, three ways you can be "self-employed" in the sense that it takes the form of you being in charge of your own life.

• A Sole Proprietorship - You conduct business as yourself.  This provides you with the least amount of legal protection.
• An umbrella company - You pay another company to invoice and file taxes and keep your accounts for you for a certain fee.  This is usually a costly thing, but means you don't have to worry about keeping your accounts and other legal reporting requirements in line (at least in the UK)
• A Limited Company - You have your own limited company.  Usually you pay yourself a minimal salary to get all the NI contributions credits you need and pay the rest to yourself in dividends.  This requires you to hire an accountant and keeps your accounts in order as well as file lots of reports, though if you can manage through it, it maximises your money with the least amount of risk that you would lose all your assests if you were sued.

As lizzit says, these all have different tax implications and depending on the nature of your work, you can easily fun afoul of IR35 and then greatly change your UK tax burden.

The SOHO forum here can provide you with more information about self-employment.