When you are employed, your employer deducts tax and National Insurance (NI) from your gross pay and the balance is paid to you. The amounts deducted are paid to HM Revenue and Customs (HMRC) through your employer's Pay As You Earn Scheme. Assuming you have no other sources of income and are not a higher rate taxpayer, you are unlikely to have any further tax liabilities and will not be asked to complete a self assessment tax return (SATR).
Self-employed taxpayers are required to register with HMRC within 3 months of starting a business and failure to do so results in a £100 fine. Self-employed individuals must disclose their profits on self assessment tax returns and they are responsible for ensuring that any tax and National Insurance liabilities are paid by the due dates. This means that you will be required to maintain appropriate records of all business transactions.
Your local TaxAssist Accountant can provide you with guidance and support to help you comply with these regulations, together with identifying any tax savings available to you. They can also develop sound ways of improving business profitability from the outset, ensuring you can measure the progress of your business against your desired targets.
By Jo Nockels
Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.