When should I register as self employed?

You’d think that this would be a no brainer, wouldn’t you?

But no, it’s not quite straight forward.  Lets look at this a little deeper, and find out if you are actually self employed.

You’re self employed, and need to register as such if you:

Decide how, when, where you do your work

Decide how much to charge.

Have several customers at any one time.

Provide the main items required to do your work.

Sell goods or services to make a profit

Run your business yourself, and take responsibility for it’s success or failure.

When?

There are lots of urban myths about this, such as needing register by 5th April, in October etc., so let’s try and clear these up.

You have to register with HMRC as soon as you become self employed.   Particularly if you’ve earned more than £1000 between the dates of the tax year.  If you’ve earned £1000 by June, and you started trading in April, then you need to register.  Don’t wait until 5th April.

Basically, you could register as self employed as soon as you begin.  Literally, make your first sale, raise your first invoice, post your first social media content.  That’s when you’re self employed, right?

or

You could wait.  Wait until your turnover hits £1000, as per HMRC guidelines.

Here’s how.

 

Once you are registered, you do have responsibilities. You need to:

  • Keep records of your business’s sales and expenses.
  • Submit a self assessment tax return every year.
  • Pay tax and National Insurance on your profits if appropriate.

 

Whilst I’ve got you, it would be remiss of me not to mention the actual self assessment deadline.  They run in tax years, not calendar years, and are reported in arrears.

For example, for the 2018/19 tax year, running 6 April 2018 to 5 April 2019, you would:

  • need to register for Self Assessment by 5 October 2019 if you’ve never submitted a return before
  • submit your return by midnight 31 October 2019 if filing a paper tax return
  • submit your return by midnight 31 January 2020 if filing online
  • pay the tax you owe by midnight 31 January 2020.

If you don’t manage to hit any one of these deadlines, there may well be a penalty.

 

Please do contact me for more information if you’re unsure.