Right, baby fed and in bed...
Are you really self employed?
What sort of contract do you have with this company? Are you really self employed, or have they just said that you need to be self employed? Some companies will try to pull a fast one by claiming their workers are self employed so that they don't have to deal with PAYE compliance, and to cut their employers NIC bill which is a big cost. If there's any doubt then HMRC will come down on them like a ton of bricks.
Self employment vs employment is basically a question of who bears certain costs and who deals with compliance. If you're self employed, there's less NIC costs (both in terms of your NIC costs and in terms of the total NIC paid) but you have to do your accounts and tax returns. If you're employed, then your NIC costs are higher, the company has employers' NIC to pay, and they have to do all the PAYE stuff in relation to you.
Rough and ready tests for self employment/employment...
1) Mutuality of obligations - Does the company have to provide you with work? If they offer you work, do you have to do it? Can you just rock up and accept work when you feel like it or must you take it?
2) Integration - Do you become part of their organisation? Do you have a uniform? Do you have access to their facilities?
3) Control - Can the company tell you what to do? When to work? Where? How?
4) Equipment - Do they provide you with equipment or do you provide your own?
5) Risk - How much risk are you bearing in all this?
6) Can you send a substitute in your place?
Do you see yourself as self employed? Are you a Sky salesman who just happens to be working a contract for these guys at the moment? Or are you working for them and they've told you to be self employed? Who pays you? The company, or the clients you're selling Sky to?
I'd hazard that they're pulling a fast one and just want you to be self employed to make their lives easier. That's illegal and dishonest and could have repercussions for the company in terms of penalties. It also means you have to faff about doing your own returns and stuff, which sucks.
Self employed - what you have to do
Assuming that you are self employed, you'll have to register for self assessment. You'll also have to register as self employed. I think the form you have to fill in is called a CWF1, but I could be wrong. Have a look on the HMRC website.
You'll need to figure out the date to which you're going to draw up accounts. I'd suggest 31 March purely from an administrative point of view. The rules for basis periods are complex, so you may as well pick a date that entails the minimum hassle. You'll then need to start logging all income and expenses that relate to the job. There's rules on what you can and can't deduct for tax purposes, and it's quite complicated. You can't deduct depreciation on capital assets, but you can deduct capital allowances on qualifying equipment. If you use your own car or house or other equipment, you may be able to deduct a portion of the running costs. There's a hell of a lot of rules for calculating taxable profits, and if this is going to be a serious and ongoing thing, then I would advise that you get an accountant and get them to do it, as it will save a lot of time and effort.
VAT
For some reason people think that once you're self employed you can claim VAT back on anything you please. You can't. If you are registered for VAT, be that because you exceed the turnover limit of £67k per year (I think that's the current threshold) or because you've volunteered to do so, then you must charge VAT on the services provided (if they're VATable) and then you can deduct any VAT on your costs. The balance you pay over to or claim back from HMRC. So while you can claim back VAT on costs, you're only in fact deducting it from a larger amount of cash that you've charged your customers and are about to pay over to HMRC. You can also only claim VAT back on business costs. There's restrictions on the VAT you can claim back in relation to cars.
I doubt your turnover is anything approaching the threshold, and I doubt there's any reason why voluntary registration will help you. Don't register, and as someone said above - just forget about VAT. Yes, you're paying it on your purchases, no you're not charging it, no you can't claim it back.
In conclusion...
This all sounds like a massive pain in the arse, and it sounds to me like the company is only insisting you be self employed to cut their costs. It might be worth looking for a new "employer". Alternatively, if it is genuine, get an accountant and get them to handle all this stuff.
I'm doing a combined CA/CTA course.