Do I need to file a tax return if I am self-employed?

If you are self-employed, you are required to fill out a Self-Assessment tax return with HM Revenue & Customs. However, you may wonder if you are self-employed? This article will help you determine if your employment status for tax purposes and provide practical advice to make filing simple.

In essence anyone who is in business either as a sole trader or part of a partnership and receives income that is not taxed under the PAYE system is effectively self-employed.

So the simplest question to ask is: Do you work for another person or company to receive income? Certainly there may be other factors to consider, but the answer to that question can sum it up for most taxpayers.

If you’re still unsure, here are some other questions to ask.

Do you …

  1. Have the final say in how your business is run?
  2. Risk your own money in the business?
  3. Have responsibility for the losses as well as profits of your business?
  4. Provide the main items of equipment you need to do your job?
  5. Hire other people on your own terms to do the work you have taken on and pay them at your own expense
  6. Have responsibility for correcting unsatisfactory work in your own time and at your own expense

How do I register as self-employed?

There are three ways to register:

  1. Online to HMRC. This is the quickest and most convenient way to register.
  2. By phone. The HMRC has set up a self-employed helpline on 0845 915 4515. Lines are open from 8.00 am to 8.00 pm Monday to Friday and 8.00 am to 4.00 pm Saturday and Sunday (closed Bank Holidays).

3.  By post. You can download and print an application (PDF 201K) to post to HMRC.

If you have an agent who will be completing the form for you, you must first ensure that you have signed a form 64-8: This authorizes your agent to act on your behalf.

You will need to provide the following information:

  • Name
  • Address
  • National Insurance Number
  • Date of  Birth
  • Contact Telephone Number
  • Contact Email Address
  • Date Self-Employment Started
  • Nature of Your Business
  • Business Address
  • Business Telephone Number
  • Unique Taxpayer Reference (UTR) if you were previously within Self Assessment
  • Your Business UTR if you are joining an existing partnership
  • Full Name(s) and Date(s) of Birth or Your Business Partner(s)

If you are self-employed in a partnership, each of the partners must register separately.

What if I have income taxed by the PAYE system, but am also self-employed?

It’s possible for you to be employed and self-employed at the same time. If you earn income from both employment and self-employment then you Income Tax and National Insurance contributions are due separately and collected in different ways.

If you work as an employee you pay any Income Tax and Class 1 National Insurance contributions due through PAYE (Pay As You Earn). Your employer deducts these from your pay before you get it.

If you have any income from self-employment it’s your responsibility to pay any Income Tax and National Insurance contributions due. Depending on how much you earn from self-employment you may have to pay Class 2 and Class 4 National Insurance contributions.

You pay Class 2 National Insurance contributions at a flat rate, either by monthly Direct Debit or by quarterly bill.

The total amount of tax and National Insurance contributions you pay is based on:

  • Your combined income from both jobs – or all your jobs if you have more than two
  • Any allowances and reliefs you get

If you expect to be both employed and self-employed you may be able to ‘defer’ some of your Class 2 and/or Class 4 National Insurance contributions. You’ll pay what’s due after the end of the tax year when the actual amount has been worked out. Doing this will make sure you don’t pay too much National Insurance on your self-employment income.

What Is My Deadline?

There are four key deadlines for sending in your tax return and paying any tax due:

  • 31 October – this is the deadline for sending in the majority of paper tax returns
  • 31 January – the deadline for sending in your tax return online
  • 31 January – this is the payment deadline for what you owe for the previous tax year, and the deadline for making your first payment towards the current year’s tax bill (called ‘a payment on account’) if one is due
  • 31 July – the deadline for your second payment on account – if one is due

Penalties and surcharges may apply if you miss these deadlines.

The deadlines for sending in your tax return are only later than the dates above in special cases, for example if you received your tax return late.

For more details about tax relief and expenses you can check out the official HMRC site. Any more questions? We are happy to help. Everybody has tax questions, why not apply for some expert help with your tax return?

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13 comments

  1. Mark Lloyd says:

    Good Morning,
    I started as self employed in September 2012, do I need to complete a tax return this year or will I complete it next year. Many thanks.

  2. Helen says:

    My son has never had a “proper job” – he signed on for a while after a year at college, but the staff at the jobcentre were so awful he refused to go back.

    He gets odd days of work through contacts, but they are cash in hand and nobody ever gives him a payslip. I thought this was illegal? How does he sort out his tax – given that he has never earned even the personal allowance? And what does he do about NI – I’m worried that he is not building up a pension

  3. bat says:

    Hi there, I have started my business in 02/2011, as self-employed with partnership, What do I need to do now, I am completely lost pls help me

  4. elly says:

    I closed my business in Feb.2009 and reopened again in Sep.2010. I just received a letter from HMRC for a penalty, for not fill out a tax return 2009/10.
    Does I need to fill out a zero tax return form?

  5. k. cubert says:

    my son has been self employed for the last few months he has i think it is called an sc60? which he gives his boss and he deducts tax before he is given his wages.He has received a letter asking him to fill in a tax return, does he have to do this or does he give it to his boss. thanks you.

  6. Kasim says:

    Hi thank you for your help and I will be looking to use your services for my tax return for 2010-2011 as it is more complicated. But this one I’ll have a go at doing myself- though I do have one question- when I put in the tax taken by my paye employer do i include my NI amount to the total sum or just the tax?

    Many thanks,

    I will be recommending you guys to my colleagues.

  7. Kasim says:

    Hi thank you for your help and I will be looking to use your services for my tax return for 2010-2011 as it is more complicated. But this one I’ll have a go at doing myself- though I do have one question- when I put in the tax taken by my paye employer do i include my NI amount to the total sum or just the tax?

    Many thanks,

    I will be recommending you guys to my colleagues.

  8. Kasim says:

    Hi,

    I need to pay my self employment taxes for 2009-2010 by the 31st and since it is my first time I wanted to ask you a few questions.

    I Registered for self employment from september 2009 so do I only do self assessment from that time period? -(Note that since I started self employment I have not been in a PAYE job)

    I was working PAYE just before I started self employment so do I include my earnings in my PAYE job as well or should I only include my self employed earnings (which was under £4000)?

    If I pay an accountant to do it for me how much should it cost?

    Thanks

  9. derrick says:

    do i need aself assessment form to fill in. i give up working 2 years a go

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