Registering for self employment
_ This is how I registered for self employment and set up my writing business (simply named "Piara Strainge") to make it all official. As far as I know, I'm ticking all the boxes! I guess I'll know for sure when I come to file my tax return in April...
NB: All of my information came from www.hmrc.gov.uk
You need to register for self assessment as soon as your circumstances change. I think you have 3 months from the new business start date, or from when you first start earning money from the new business. My start date was July 2011 so I made sure I registered by October 2011. HMRC sent me the link to the self assessment form and I filled it out online, printed and posted it back. This information is important for HMRC to get your records straight because you don't want to pay too much tax or National Insurance contributions. Details you can expect to divulge:
Your National Insurance number.
Your contact details and the contact details of your new business.
Your ten-digit Unique Taxpayer Reference number if you have previously completed a Self Assessment return. You’ll find this on letters or forms sent by HMRC about your tax return - I got my UTR number once I'd registered because this is all new to me.
The date your circumstances changed (basically your start date).
So, nothing too scary!
Once you’ve registered for Self Assessment, HMRC will set up your records and send you your new Unique Taxpayer Reference or UTR. Keep it in a safe place! You’ll then get a letter telling you when you need to send your first tax return. The letter will usually be in April, but it may be earlier if you need to send a tax return back for an earlier tax year. If you don't receive a notice or a tax return, you should contact HMRC. I'm expecting to file mine in April.
The one other thing I did was to apply to exempt myself from paying Class 2 National Insurance contributions (using form CF10). Why did I do this? Because I honestly didn't think I'd make £5,000 from now until April. Here's what HMRC say about this:
If you have low earnings
If you earn less than £5,315 per year you can apply for a Certificate of Small Earnings Exception and not pay Class 2 National Insurance contributions. However, you might decide to carry on paying them voluntarily to keep your entitlement to the State Pension and other benefits.
I'll hopefully do better in my second year of self employment, but playing it safe in Year 1.
More information about Class 2 National Insurance contributions can be found here.
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Blogging is an amazing concept so here I am giving it a whirl. You'll get words. You'll get pics. Sometimes a vid or two. You'll get tongue in cheek, the odd humble opinion and an honest insight into my travels and writing life. Maybe even a few gems along the way. I'll be musing on home turf as I see more and more of the UK and sharing my experiences further afield on holidays and adventurous trips across the globe.