If you become self employed you are responsible for calculating and paying your own income tax and national insurance contributions. You should keep full records so that you can backup any payments.
You should let the Inland Revenue know as soon as possible when you become self employed, doing this should avoid you receiving a fine.
The amount of tax that you have to pay when you are self employed is the same as the amount you would pay if you had a regular job. The tax rates are as follows:
|Income Tax rates and taxable bands|
|Starting rate for savings: 10%*||£0-£2,320||£0-£2,440||£0-£2,440|
|Basic rate: 20%||£0-£34,800||£0-£37,400||£0-£37,400|
|Higher rate: 40%||Over £34,800||Over £37,400||£37,401-£150,000|
|Additional rate: 50%||Not applicable||Not applicable||Over £150,000|