Being Self-Employed: Three Things to Remember

Self-employment has many undeniable benefits including being your own boss, flexibility and reaping the rewards. However with reward comes responsibility and there are also a lot of necessities that go along with working for yourself. These can be easy to forget without having someone to remind you.Being self-employed does not exempt you from many of the standard procedures and requirements of employees therefore in this article, we will address three of these key notions.1. Register as self-employedWorking as a self-employed person means that you are responsible for ensuring that your tax and National Insurance contributions are paid on time and in full. Because of this, you must declare yourself as self-employed to the HMRC in the first instance. If you fail to let them know in the beginning then you could face costly penalties later down the line.The HMRC will need to know many different factors about your business so that they can set up the right tax records for you their end.2. Get your VAT rightVAT is important for businesses and it is even more important that you get it right. VAT will feature a key part of your business, therefore it is important that you understand what is required of you and manage your VAT effectively.Dependent on your business turnover, you will need to register with the HMRC for VAT and failing to do so can have its implications. If you are unsure about some of the more technical elements of being self-employed and paying VAT, you may wish to seek advice from an chartered accountant who will be able to offer further guidance on the matter.3. Tax returnsIf you are self-employed in the UK, you are required to complete an HMRC self assessment tax return each year. This will cover information regarding your profits; both from the business itself and other incomes that you pay tax on such as rental income. This information will then be used to calculate the amount of income tax and national insurance which is payable.In order to do this, it is important that you keep record of your business accounts including any tax being paid throughout the year, your income and expenditure as well as your personal records. Your tax return must be filed on time or you could face a penalty therefore it is vital that you keep your records accurate and fully up-to-date.

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