HOW DO YOU REGISTER AS SELF-EMPLOYED?
Making the decision to be self-employed is an exciting but daunting change. For most people, it’s the rules and regulations that are most off-putting; the sinking dread at the idea of filling out form after form with hawk-like precision. But conceding defeat before you’ve begun would be an injustice, because with a little know-how, becoming your own boss can be a hassle-free process. So how do you register as self-employed? Here’s our handy guide to answer your every question.
FINDING OUT HOW TO SET UP AS SELF-EMPLOYED
It goes without saying that being self-employed is very different to employment. It’s not like the first day at a new job, handing over your National Insurance number, providing your bank details, and looking forward to the pay cheque at the end of the month. To get paid, it’s up to you. To stay on the right side of HM Revenue and Customs (HMRC), it’s up to you. You’re responsible for your tax payments, National Insurance contributions, and legal status as a trading entity. And while it is a lot of responsibility, it is perfectly manageable with the right advice.
First things first; you don’t need to register as self-employed right away. You’ve got a three month window to confirm you are earning – whether that’s full-time or alongside your current role – so there’s no urgency. That said, you do need to make note of this date on a calendar. If you don’t register within a three month period, you may incur a financial penalty.
When you’re ready to take the plunge, you will need to register as self-employed. To do it, you’ll need to provide HMRC with some details. It begins by registering online for business taxes – providing your details as well as your trading activities. Next, it’s over to HMRC; they will set up your records for Self Assessment, National Insurance and PAYE for any employees you may have.
I’M REGISTERED AS SELF-EMPLOYED – WHAT NEXT?
Once you’ve registered, you’ll be provided with an online account for Self Assessment. You will also need to start paying self-employed National Insurance Contributions, known as Class 2. Currently this is set at £2.75 per week, which you can pay via Direct Debit.
We also recommend that you:
- Open a business bank account
- Obtain business insurance, specific to the type of business you have
- Establish a system for keeping accurate records of all income and expenditure, from day one
- Keep all invoices receipts and bank statements
- Adopt a cloud-based accounting solution (such as Xero), if you are comfortable using online software
Do you need help?
Got any more questions about how to register as a self-employed professional? Perhaps we can help at UWM Accountants. We are a dedicated team in Leeds. As a focused and friendly firm, we can offer attentive and helpful customer attention, whilst also reacting quickly to any new challenges that your business faces. For more information, please contact us today call 0113-231-0202, e-mail firstname.lastname@example.org or take a closer look at the UWM site. Jonathan Myers can be found at Google+