Ready to join the 4.2 million self-employed workers in the united kingdom? Hooray for you, it's an exciting time when you register yourself as self-employed.
Feel free to use our guide on how to register yourself as self-employed in the UK. When you finished signing up to be self-employed check out our other self employed articles:
Registering Yourself As Self Employed, Step By Step
This article will give you a thorough rundown of all the necessary steps to register yourself as self-employed but here it is in a nutshell:
Make sure your work classifies as Self Employed.
Set yourself up a gov.uk account.
Get your Government Gateway details and complete registration of your self employed business.
Once you are up and running you will have to meet some obligations that every self-employed person has to do, such as filing your self-assessment tax return.
Should I Be Self Employed?
All self-employed people in the UK have to register with HMRC so they can calculate and pay taxes, but what defines someone as self-employed?
These are the most common indicators that you are self-employed:
You run your own business
Have multiple customers at the same time
Choose your own working hours
need to or want to hire employees
set individual terms with each customer
sell goods or services to customers in a business manner, not just flogging old stuff online.
meet one or more of the above? then the government sees you as self-employed and need to register ass elf employed and declare your income to HMRC.
How To Register as Self Employed
Luckily we live in the internet age and it is pretty straightforward, all you need is your email address to register yourself as self-employed using the government website.
The sign-up process is followed easily and help is available on every page if you get stuck.
Here's some information you should have ready for when you register:
Business startup date
national insurance number
personal details including address
descriptions of the work you do
After registering yourself in the system, you will receive a 10 digit UTR number (unique taxpayer reference) by post. Keep this safe as it will be required every time you need to log on or file your taxes or access other government services.
Pick A Name
Picking a name for your business is a personal choice. It's not uncommon for people to use their own name followed by their profession "Burt Reynolds Painting" for example. Depending on the nature of your business you can choose something more punchy or even use a website name if it makes sense.
Can I Register for Self Employed Whenever I Like?
HMRC recommends registering as soon as possible. IE the moment you decide to start a self-employed business. There is an actual deadline, however, being October 5th of the tax year that you started trading during.
Starting your business in August 2022, you should register by October 5th 2023 for example.
We don't recommend leaving things that late though as it doesn't give you much time to react to any problems with your tax bill and could result in a rather large fine, not what you want during the early period of your business.
Responsibilities of the Self Employed
All self-employed workers in the country have a small set of responsibilities.
Bookkeeping or record keeping is an important part of any business and should be done carefully, paying attention to invoices, bills, receipts and making sure everything is filed correctly. Doing this can save you a headache come tax season. some choose to outsource their bookkeeping to companies like ours, but this isn't viable for a lot of beginners.
31st of every January is the tax deadline for self-employed. Before then they have to fill out a self-assessment tax return online.
Your tax payments will be due January 31 and July 31, although staggering these payments can be arranged if needed. Income tax isn't the only thing you need to pay, you also will have to make national insurance contributions.
Having over £85k in turnover takes you over the VAT threshold and as such you will have to register yourself for VAT and make payments for that too.
Paying attention and fulfilling your responsibilities will lead your self employed business to green pastures away from the taxman, which is what it's all about really.
We hope you have found value in this simple guide. If you are looking for more help feel free to get in touch and we will be happy to help!