Registering a New Business

I am thinking of starting my own business this month. A friend who is currently self employed said I had to register as self employed to avoid a fine. Can you please tell me how to do this and how soon do I have to register?

1st March 2010

You have to be registered as self employed for national insurance purposes within three months after the end of the month in which you became self-employed. In your case, as you started in March 2010, you must be registered by 30 June 2010, and failure to do so will result in a £100 fine. Unless you are proposing to earn below the small earnings exception level (currently £5,075 for the 2009-10 tax year), you are required to commence payment of class 2 national insurance contributions at £2.40 per week.

There are various ways to register. The most popular being either by telephoning the Self Employed Registration Helpline on 0845 915 4515, by completing form CWF1, or registering online via the government gateway portal on www.hmrc.gov.uk .

In each case you will need to give your full name, address, post code, date of birth, national insurance number and, if you wish to pay the class 2 national insurance by standing order, the details of the bank account from which it will be paid.

Registering will act as a joint notification for both tax and national insurance purposes, and you will receive a 10 digit Unique Taxpayer Reference (UTR) for tax purposes, together with a tax return to complete for the 2009/10 tax year in April 2010.

By Jo Nockels

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