Register as Self Employed

Otherwise known as a Sole Trader, you are on your own and responsible for your business’ success or failure. This is a big step and responsibility for anyone taking this route but most rewarding if done properly.

The rule states that if you earn more than £1,000 in one year, you are required to submit a self assessment tax return each year, thus becoming self employed.

You will need to keep records of your business’s sales and expenses for up to 5 years, as HMRC may require to see them at any time upon request.

Through your self assessment, you are required to make yearly tax and national insurance payments based upon your profits, like an employee you are able to utilise the personal allowance also which is currently £12,500 as at 2020/21.

If you do not register by 5th October in your business’s second year, you could be fined!

To register, you will need to register with HMRC and create a government gateway account – https://www.gov.uk/log-in-register-hmrc-online-services

Most importantly you will need to register as self employed which will generate a Unique Tax Reference (UTR) number which you will need to file and submit your tax return for the year.

This may feel quite daunting as well as running your own business which you know very well, get in touch with us at MTD to find out how we can help and guide you through this process!