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If you decide to work for yourself, say to supplement your income while you are studying, you will be 'self employed'. You'll need to tell us by registering yourself even if you already complete a tax return each year. You can register with us by calling the helpline for the newly self employed on 0845 15 45 15 or by completing our starting up in business form CWF1. Form CWF1 also allows you to register for Class 2 National Insurance contributions (NICs). Once you have sent in the form we will set a record up for your tax and NICs. You should register within the first three months of starting working for yourself. If you don't, we may charge you with a penalty of £100. You will also need to complete a Self Assessment tax return each year and keep records. Your tax bill will be based on the figures you give in your return and will take into account your personal allowances. Once we have calculated your tax bill, we will send you a Statement of Account letting you know how much you need to pay and when you should make your payments. You will usually pay your year's bill in two halves: on 31 January and 31 July. As a self employed person, you will pay your tax and Class 4 NICs through the same Self Assessment tax bill on 31 January and 31 July. You will also have to pay Class 2 NICs. We can either send you a quarterly bill or you can pay by direct debit from your bank account. If you wish to pay by direct debit, you should complete form CA5601. Check the HM Revenue & Customs 'Thinking of working for yourself' site for more information |
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