Q: I have recently commenced self-employment. It seems to be very confusing as to what I need to do to register with HMRC. Can you give me some pointers?
A: Once a person has established self-employment he has responsibilities in relation to tax, NICs and possibly VAT.
HMRC produce a leaflet SE1 ‘Thinking of working for yourself’. This sets out the basic requirements for those considering self-employment or who have already started their own business.
The newly self-employed can also telephone a helpline on 0300 200 3504 or access HMRC guidance at www.gov.uk/business-tax/self-employed. Online registration can be made.Registration must be made as soon as possible.
There are penalties for failure to notify chargeability to tax and Class 2 NICs. Again online registration can be made or by completing form CWF1. A person needs to register for Class 2 NIC’s even if for example they are also employed and paying Class 1 NIC’s. Following the reform of the collection of Class 2 NIC, the payment of the correct amount of NIC will be dealt with through the self-assessment system.
Registration for VAT must also be made if the VAT taxable turnover is more than £83,000.
Other registrations may need to be considered for example PAYE or the construction industry scheme.
In association with Croner Taxwise
Click here to download our book 71 Ways to Pay Less Tax.