When Do I Need To Register As Self Employed (2024)

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If you are operating as a self-employed individual in the UK, you must register as self employed with HMRC as soon as possible after you start trading, and definitely by the 5th October after the end of the tax year in which you became self-employed. For example, if you started your business on 1 April 2023, the deadline to register would be 5 October 2023. You must also register when you have earned over £1000 in self trading profits in any given tax year.

Do I need to register for self-employment?

All self-employed people need to register with the HMRC (HM Revenue & Customs) so that they can pay tax on money earned through self-employment. Registering with the HMRC will not automatically register you for benefits.

Registering with the HMRC is very simple. Simply head over to their online portal and enter your details. You’ll receive a unique, ten-digit UTR that will give you online access to a range of government services and resources. If you have additional needs, the HMRC does offer other forms of support and different ways in which you can register.

Most people choose to trade under their own name but you could choose a business name that is different, just make sure that it isn’t already taken.

How long can you trade before registering as self-employed

You can start trading as a self-employed individual before registering with HMRC,but you must register when you have earned over £1000 in the current tax year, and by the 5th October following the end of the tax year that you began trading.

It is important to note that even if you are only earning small amounts from your business activity, it is still important to register with HMRC as soon as possible. Failure to do so could lead to serious financial consequences.

What is the deadline to register as self-employed with the HMRC?

The HMRC recommends that you register your business as soon as it is possible for you to do so. However, there is a cut off involved with registering your business, and it is 5 October after the end of the tax year that you began your self-employment. For example, if you started a business/ became self-employed in July 2020, you’d need to register your business by 5 October 2021 at the very latest.

You should not wait until the last minute before you begin the registration process just in case something goes wrong. You don’t want to rush. If you do not meet the stipulated deadline, you could find yourself having to pay a penalty which you could easily have avoided. Not registering your business before this period could result in penalties being issued by HMRC.

What does it mean to be self employed?

Around 5 million UK citizens are currently self-employed, making up around 15% of the working population. Someone who is self-employed works for themselves instead of working for a company and receiving a wage from an employer. While being self-employed may seem carefree as you get to determine your own working hours, where you work, and the type of work you do, there are still many responsibilities that come with being self-employed, the most important of which is registering yourself as self-employed and paying any taxes owed on time each year.

Am I able to register as self-employed if I am currently employed

If you currently have a full-time or a part-time job, you will still be able to register yourself as self-employed if you do self-employed work or own a business. It is still a legal requirement to register as self-employed.

The main reason why you may not be able to register yourself as self-employed is if your current employment contract prohibits you from doing so because of a conflict of interest. Then you may need to choose between being employed or self-employed or seek out employment that allows you to run a business in your own time.

Why should I register as self-employed

Apart from the primary reason for it being a legal requirement to register yourself as self-employed, there are other benefits to registering as self-employed with HMRC, which include:

• Having free access to services and benefits provided by the HMRC.
• By registering yourself as officially self-employed, you may feel more motivated to work towards your business goals.
• After having registered, you’ll be required to keep precise track of income and finances, as you’ll need to submit a self-assessment tax return, and this may assist you when it comes to budgeting.
• Your tax will be properly calculated by the HMR, and you will have peace of mind knowing that you are paying the correct amount of tax.
• Officially contribute to the economy.
• If you don’t register your business with the HMRC, you run the risk of someone reporting your business. In an effort to lay low, you may not advertise as much as you should and become careful about who you tell about your services, and this will only be detrimental to your business in the long run.

How to start a business in the UK

Anyone who wants to start a business in the UK must consider the legal requirements and regulations they need to adhere to. This includes registering your business name with Companies House, obtaining any necessary licenses or permits, and setting up a business bank account. You will also need to familiarise yourself with taxation rules and filing deadlines, which can be found on the HMRC website. There are also a number of government programmes and grants available to help start-ups get off the ground.

Do I need to register my business?

Yes, if you are self-employed and running a business in the UK then you must register your business with HMRC. The deadline for registering as self employed is 5th October after the year you started trading. You will need to provide information about yourself, including your name, address and National Insurance number, as well as details of your business. Once registered, you will be able to receive regular notifications from HMRC about any obligations or responsibilities that you have as a business owner.

Should I register as a sole trader or a limited company?

Most people who work for themselves and work their own hours etc. would register as sole traders. Most self-employed people are sole traders, and it is probably the most straightforward process when it comes to registering as self-employed. Sole traders are solely responsible for the running of their business and can keep all proceeds. However, all debts will also be completely your responsibility.

You can also register as a partner if you own a business in conjunction with other parties.Registering as a limited company is slightly more complex as you will need to register your company, and you’ll most likely have to register yourself as an employee of the company too. A limited company is a distinct company with a brand identity.

You may need to assess your self-employment goals when deciding whether you want to register as a sole trader or a limited company. It may also help to speak to a professional financial advisor.

Other responsibilities of being self-employed in the UK

Besides registering as self-employed with the HMRC, there are other responsibilities involved with being self-employed in the UK.

One of your biggest responsibilities will be paying your own National Insurance Contribution. National Insurance is a legal tax requirement for anyone earning money. Most self-employed people need to pay Class 2 NIC, and if you make above a certain amount, you may also need to pay Class 4 NIC.

The other major thing that you will become responsible for as a self-employed person is submitting your Self Assessment tax return to the HMRC. Once this tax return is submitted, the HMRC will calculate your tax bill and send it to you to be paid. In order to submit an accurate Self Assessment tax return, you’ll need to keep detailed records of your business expenses, transactions and income. The deadline for online Self Assessments is the 31st of January.

If your annual turnover for your business is over £85,000 for the tax year, you’ll need to register for VAT as well.

As a self-employed business owner, it is expected that you are aware of the various responsibilities that you have. You won’t be able to claim ignorance should you not meet any legal requirements. That is why you should take the time to become business savvy and inform yourself on all the legal-requirements of a self-employed person.

Is there an earning threshold for registering as self employed?

If you currently make under £1,000 from self-employment within a tax year, you will not need to submit a Self Assessment tax return as you’ll be covered under the trading allowance. If you are both self-employed and working for an employer, you will still be required to submit a Self Assessment tax return if your total income from self-employment is over £1,000.

There is no earning threshold for registering as self employed but freelancers and those working on casual contracts do need to register with HMRC when they earn more than £1,000 per year. Even though a direct income threshold does not apply, anyone who receives an income through self employment should still take responsibility for making sure any relevant tax and other dues are paid in full and on time – failure to do so can lead to hefty fines or even criminal action.

What insurance do I need after registered as self-employed

Self-employed individuals must make sure that they have adequate insurance cover in place to protect them from any potential risks or liabilities. This could include public liability or professional indemnity insurance, depending on the type of work you do. You may also need to obtain an employer’s liability policy if you employ anyone to help with your business. It is important to shop around and compare different policies before making a decision.

While most of the time, it will be up to whether you want insurance for certain assets and situations, depending on the type of industry you’re in, certain types of insurance will be a legal requirement. For example, if you are using a vehicle for your business, whether for travelling to and from clients or buying and dropping off goods, you are required by law to have valid vehicle insurance and be insured for business use. If you are working in a profession that requires certification, such as an electrician or plumber, then you may need to have public liability insurance and professional indemnity cover.

What do I do once I have registered as self-employed

Now that you are officially self-employed, you can start working towards your business goals and advertising your products and services to the public without the risk of someone reporting you to the HMRC. It’s time to start officially building your business and enjoy all the advantages and freedoms that come with being self-employed.

The first thing you need to do is ensure that you have an efficient system in place for recording income, expenses and other finances. The more detailed your financial records are, the more likely you will be able to satisfy the HMRC when it comes to your tax returns.

Next, you’ll want to research some of your other rights and responsibilities of a self-employed person and come up with a customised action plan for going forward. One of the things you should look into is health and safety compliance and ensure that your business premises and operations comply with all industry standards.

Speaking to other self-employed people will help you gain insight and knowledge on what to expect going forward.

How do I register for benefits if I am self-employed

One of the biggest disadvantages when it comes to being self-employed is how difficult it is to claim and register for benefits. There is no one way to do this. Instead, you’ll need to go to local councils and departments individually and let them know you are self-employed and enquire which benefits are available to you. For instance, you won’t be able to qualify for traditional maternity leave and pay, but you may be able to qualify for a maternity allowance.

When it comes to benefits, the best thing you can do is keep yourself informed and apply for any sorts of benefits that may be applicable to you and your situation. There are many programs that are there to help those with additional needs, as well as programs that can assist you with funds to start your business.

Summary

Self employed people need to familiarise themselves with the deadlines and protocols they must follow when running their own business. Anyone that is self employed is responsible for registering their business with HMRC and paying all tax due, and the deadline for registering as self employed is the 5th October after the year you started trading.

Once registered, self employed individuals must complete a Self Assessment tax return every year and submit it by the 31st January. HMRC will then provide an assessment of how much tax is owed to them. Any payments due must be made on or before the 31st January of the following year, with potential surcharges for late payment.

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