If you already work in a trade, starting your own business is not about learning the job — you have that. It is about swapping a wage for invoices: setting a rate that carries a van, insurance, tax, holidays and quiet weeks, and finding your own customers instead of having work handed to you. This guide covers the leap from employment, what it actually costs, what to charge, and where the first jobs come from.
Do you need anything new to go self-employed?
Usually your existing qualifications carry over — you are the same tradesperson the day after you quit. Three things do change. Regulated work stays regulated in your own name: gas work needs Gas Safe registration and notifiable electrical work needs registration with a Part P competent person scheme, held by you or your business rather than your old employer. Insurance becomes yours to buy — public liability at minimum, because your employer's cover no longer stands behind you. And if you will subcontract on construction sites, the Construction Industry Scheme applies to how you are paid. (This page is part of our wider guide to starting a business.)
Making the leap from employment
The pattern that works: line up work before you hand in your notice. Tell people early, take weekend jobs while employed if your contract allows, and do not leave until you have a first month that looks busy. Then give yourself a cash buffer — three months of personal bills is the comfortable minimum — because self-employment pays unevenly at the start and nobody pays you for the gap between finishing a job and the invoice being settled.
The other adjustment is quieter: as an employee, sick days, holidays, the van and the tax were someone else's problem. Now they are all inside your rate. That is not a reason to stay employed — it is the reason the next two sections exist.
What it costs to start
One-off, to get going: the van, if you do not have one — for most trades it is the single biggest startup cost — plus the tools you do not already own, insurance set up, workwear, and a free Google Business Profile so you can be found.
Every month, once you are working: the van as a full category — finance payment, fuel, insurance, servicing, tyres, road tax, breakdown cover — plus public liability insurance, tool replacement, phone, materials and consumables you cannot bill on, and an accountant if you use one. Our insurance guide covers which policies matter for which trade.
None of these are big numbers alone. Together they are the difference between your employed hourly rate and the rate you must now charge — which is the next section.
What to charge, and what you would actually earn
The most common mistake tradespeople make when going self-employed is charging a bit more than their old wage and calling it a rate. Your rate now has to carry everything your employer used to pay: the van, the insurance, the tools, the holidays, the sick days, the pension, the quiet weeks and the unpaid hours quoting. It also has to reflect that you will not bill 40 hours — for most one-person trades, around 25 chargeable hours a week is realistic once travel, quoting and admin are counted.
Take Chris, an employed carpenter in Stoke on roughly £17 an hour, going out on his own. He sets his rate at £45 an hour. At 25 chargeable hours a week that is about £4,500 a month of sales — but then the van and fuel, insurance, tools, phone and accountant come off, and tax and National Insurance after that. What lands in his pocket is well ahead of his old wage, but nowhere near what "£45 an hour" sounds like. Set the rate lower and the sums stop working; the rate is not greed, it is the payroll department you just became. Our pricing guide shows how to build yours from your own numbers.
Getting your first customers
Your unfair advantage over a stranger starting cold is that people already know your work. Start there: former colleagues, the firms you have worked alongside, family and friends — tell all of them, specifically, that you are taking your own jobs now. Then build the two channels every local trade runs on. Facebook first: local groups and recommendation threads are where "can anyone recommend a good carpenter?" gets asked daily, and a business page with photos of finished work wins those threads. And a free Google Business Profile with reviews, which decides who gets the "near me" calls.
Ask every happy customer for a review while they are still admiring the job. Our guide to marketing a small business covers local search and reviews properly. Want help getting customers? Our sister agency The Fractions runs ads and builds websites for small UK businesses — the pages, the ads and the enquiries behind them.
The admin
Most tradespeople start as sole traders: register with HMRC, keep records of income and costs, file a Self Assessment return. A limited company can make sense later, once earnings grow or contracts ask for it. From the first invoice, put a slice of everything aside for tax — as an employee it was deducted before you saw it; now it arrives with your money and leaves in January. Keep every receipt: tools, fuel, materials, insurance and training all reduce your taxable profit.
Turning this into a plan
A trade business plan is one honest page: your rate, your realistic chargeable hours, the van's full costs, insurance, and the month the new business beats your old payslip. Doing it before you resign turns the leap into a decision instead of a gamble — you will know the rate you need, the buffer you need, and how many booked jobs make it safe to go.
Create a mini business plan in minutes with Plan.business. Put in your rate, your hours and your costs, and it works out the rest — what you will make, when you break even, and what you need to charge to hit your target.
Frequently asked questions
How much does it cost to start a trade business? If you already own your tools, the van is the main cost, followed by insurance and small setup items. Many tradespeople start with the vehicle they have and upgrade once the diary fills. The bigger financial question is the cash buffer for the uneven first few months.
Should I leave my job before I have customers? No. Line up work first — tell your network early, take permitted weekend jobs, and resign when the first month looks busy. A buffer of around three months of personal bills covers the gap between doing work and being paid, which surprises almost everyone the first time.
How much do self-employed tradespeople earn? More than employment when the rate is set properly, less when it is not. The honest sum: your rate, times realistic chargeable hours (around 25 a week), minus the van, fuel, insurance, tools and tax. The rate must carry everything your employer used to pay for — holidays, sick days and quiet weeks included.
Sole trader or limited company for a trade business? Most start as sole traders because it is simpler and cheap to run, then form a limited company if earnings grow or commercial contracts prefer it. Choose for where you are now — switching later is routine.
What insurance do I need as a self-employed tradesperson? Public liability is the practical minimum — customers ask for it and some sites require it. Tool cover is worth its cost in most trades, and employers' liability becomes a legal requirement the moment you take anyone on. Your trade may add specifics, so check before your first job.
Figures correct as of September 2026. Tax thresholds, fees and rates change; check the linked GOV.UK pages before acting. Prices and costs shown are indicative and vary by area and by what's included.
What is Plan?
Plan is a free business operating system for people starting or newly running a UK business. It walks you, one simple step at a time, from your elevator pitch through brand, product and pricing, to a complete business plan — then uses everything it now knows about the business to help with the basics: logo and brand, marketing, a website, a bank account, funding, insurance, company registration. You can use as much or as little as you want.
Two ways to do this
Do it yourself, free. Plan walks you through the numbers — your rate, your hours, the van, when it beats your payslip — one short question at a time, in your browser. Do only the bit you need and stop there.
Or start with the van. For most trades the vehicle is the one big cost of going out on your own. Need to fund the vehicle? SMEmoney can search a panel of UK lenders for commercial vehicle finance — vans, cars for work, and the kit that goes in them.