Self Employed is the simplest way to start a business; it doesn’t involve any government registration fees. If you start working for yourself, you’re classed as a sole trader. This means you’re self-employed – even if you haven’t yet told HM Revenue and Customs (HMRC). The only drawback is that you are personally liable for any debts that your business runs up, these make risky options for businesses that require a lot of investment. You can be both employed and self-employed at the same time, for example if you work for an employer during the day and run your own business in the evenings or over the weekend.
If you are self-employed you would need to complete a Self-Assessment tax return, We can complete and file your return online or fill in a paper form. You would probably need to pay any Income tax you owe for a tax year in two instalments i.e. January and July plus a final ‘balancing payment’.
As a self employed, you will have to register within 3 months with HM Revenue & Customs. If you need any help with self employed registration, Please let us have information on this link.
If you are working under construction industry scheme (C.I.S), we can help you to file your personal tax return. At the end of the tax year ( usually 5th April ), HM Revenue & Customs will send you a notice to file the tax return or if we are acting an accountant for you, we will send you a reminder to file your personal tax return.
You will have to declare the income from all the resources in the tax returns.
- The full amounts on your invoices as income
- any deductions contractors have made in the ‘CIS deductions’ field
We will guide you on the relevant expenses that you can claim to minimise your tax liability. We will work out your tax and National Insurance bill and take off any deductions/expenses made by you.
If you still owe tax after this, you’ll need to pay it by 31 January following the end of the tax year. If you’re due a tax refund, we will help you to get the refund from HM Revenue & Customs.
- Register as a self-employed with HM Revenue & Customs within 3 months of your setting up
- Pay Class 2 National Insurance contributions (£2.95/week for 2018/2019). This is collected on an yearly basis with your tax bill. HMRC may abolish this from 6th April 2019 on wards.
- Set up a separate business account If possible – Ask us if you need to open a business bank account.
- File Self-Assessment tax return every year, The tax year in UK runs from 6th April to 5th April every year.
- Pay tax on yourself employment profits according to the tax band you fall in.
- Pay Class 4 National insurance contribution on profits above £8,424 (2018/2019)
- Register your Business for VAT in turnover is above the VAT threshold ( Currently £85K a year – 2018/2019)
- If you have employees, you should set up a PAYE system to collect income tax and National Insurance contributions.
- Keep records of all Sale invoices
- Keep records of all Purchase invoices/ Expenses – if you are our client, you can request us a list of possible allowable expenses. This will give you an idea what you can and can’t claim for.
- Keep records of all business bank statement
- Keep records of business credit card statements if any
- Keep records of VAT – if registered
- Keep record of all the employees & casual labour
- Keep records of any other information which you believe is relevant.
- Record Keeping recommended By HM Revenue & Customs – Click here to read more.
We try to make things transparent for our clients by providing maximum information. If you are looking for self employed accountant in London, please feel free to contact us on 0800 6441 258 or email us on info@accotax.co.uk.