Any person or individual who decides to start his own practice or business is referred to as a Sole Trader or Self-employed individual. The first of these is Register as self employed with HMRC and, most likely, Set up as a sole trader or freelancer. The business can enroll with HM Revenue and Customs (HMRC) anytime up to October 5, starting from the business’ second tax year. If the business is already registered, a sole trader can use the online service to:
If a self-employed individual is using the online service for the first time, they need to sign-in at the Government Gateway account or can use the GOV.UK verify. It will take approximately ten (10) minutes to sign up for the GOV.UK verify and once this is done, it can be used for other government services. However, this service cannot be used to purchase other software or forms to send self assessment returns for a:
Upon registration, a sole trader needs to provide the following information:
A self-employed individual can register for self assessment and Class 2 National Insurance (NI) immediately after opening a business. To register, a sole trader needs a Unique Taxpayer Reference (UTR), a 10-digit number. The UTR can be found on prior tax returns or other HMRC documents, such as notices to file returns or payment reminders. If the UTR is lost, a sole trader will automatically be sent a UTR when he/she register for self assessment or at the time of setting up a limited company. This 10-digit number, at times, can have a letter “K” at the end. It may be called a tax reference. A sole trader can also call the self assessment helpline and ask for the UTR.
The major advantage of working as a sole trader or a self employed individual is the ease of operating and managing the business. Once an individual starts operating as a sole trader or through a business partnership, he/she becomes accountable for paying the income tax and National Insurance (NI) on their own or through a small business accounting and taxation consultant like DNS Accountants. The business can register with HMRC anytime up to 5 October, from the second tax year of the business. A tax year is from 6 April to 5 April. For example, if an individual starts a new business as a self employed or a sole trader in March 2018, the individual must register until 5 October. However, if the first self employment work is undertaken in May 2018, an individual needs to register as a sole trader with HMRC until 5 October 2019.
Also, once an individual starts operating as a sole trader or self employed, it becomes imperative to complete a self assessment tax return every year and pay the National insurance (NI) contribution. Registering with the HMRC is a fairly simple process and there is very little paperwork involved and a sole trader does not have to pay any company formation cost. However, a sole trader needs to formally register with HMRC, and assume responsibility to pay his/her income tax and National Insurance liabilities.
Also, as a sole trader, the business owner needs to pay Class 2 National Insurance contributions (NIC) on the income. For the tax year 2019-2020, the NIC is £3.00 a week. But, if the business has a profit of less than £6,365 a year for the tax year 2019-2020, the business is not required to make these NI contributions. For the tax year 2019-2020, 9% of the annual profit ranging between £8,632 and £50,000, and 2% of the profit above £50,000 must be paid as Class 4 National Insurance contributions.
|Date of tax return to be filed||Deadline for paper return||Deadline for return when HMRC will calculate tax||Deadline for return online|
|On or before 31 July||31 October||31 October||31 January|
|1 – 31 August||3 months from date of notice||31 October||31 January|
|1 September to 31 October||3 months from date of notice||2 months from date of notice||31 January|
|After 31 October||3 months from date of notice||2 months from date of notice||3 months from date of notice|
Self Employment Registration Form can be accessed by clicking here.
If an individual decided to work for oneself or if someone is operating as a sole trader, he/she can even speak to the HMRC if they need any guidance for various processes. To get advice, the self employed helpline number is 0844-453-0165. The helpline operates, Monday to Friday, from 8 AM to 8 PM, and on a Saturday from 8 AM to 4 PM. The helpline can provide the following information on self-employment:
dns accountants is a skillful team of accounting and taxation professionals that helps clients with services ranging from registering as self employed to business set-up. The firm helps owners managed small businesses and private individuals across the United Kingdom. dns is an acknowledged firm of ACA’s or Chartered Accountants (CA) and the firm takes pride in saying that we are very helpful to our clients & deliver unparalleled client service and persistently help clients to handle their wealth. The firm’s learned team focuses on helping sole traders with business registration, tax filings, and other services such as self-assessment, payroll management, and bookkeeping. At dns, we are constantly in touch with our clients and offer
dns accountants offers taxation & accounting services to owner-managed-businesses or self employed individuals/freelancers/contractors. For business owners and freelancers/contractors, it is difficult to keep pace with the ever-changing government regulations and rules. Our expert team of chartered accountants and tax professionals help clients in services ranging from bookkeeping to payroll to tax planning, and filing tax returns. dns accountants in Harrow help clients focus on maximizing their wealth.
Get the best advice on tax savings, accounting services, payroll, self assessment, VAT and more, whether you want to call us directly, request a call back or chat online with our experts, rest assured that we will always give you the best advice.If you have any questions, or would like to speak to us in person, please do get in touch. We're here to help.
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Harrow, Middlesex, HA3 8DP
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“I recently starteed my own company and in need of a good accountant. With my friends reference, I started DNS accountancy services and I am a quite satisfied with their service. My account manager Sneha Gurudutta was always responsive and guided me a lot especially during my company early days. Keep u the good work.”
“I have been DNS for the last 3 months and I am very happy with the service. My account manager Sneha Gurudutta guided me and helped me with all the major/minor steps with the account setup. The weekend support they provide is really helpful. I would definitely recommend DNS to all my friends.”
“Unfortunately my son passed away without leaving any contact name of his accountant. I was able to make contact with the firm through HMRC. The staff were very prompt, caring and supportive in settling his income tax account. I was extremely impressed with the efficient caring and supportive service received from all of DNS staff.”
“Been with DNS Accountants for more than a year I would highly recommened their services. My account manager Sneha has been very helpful and helped with accounts and queries swiftly always! Having a good accountant means you can fully focus on your business, not worry about accounts and tax matters. Thank you DNS :-)”
“I have been extremely satisfied with the service I have been receiving close to past 1 year. Very professional, transparent and helpful. Special mention of my Account Manager Minakshi Arora who made my transition very smooth and always ready to go that extra mile to support and make customer happy. Definitely recommended.”
“I've recently set up a Ltd. Company and signed up with DNS for my accounting services. I've found it very good value for money and hugely helpful in terms of advice and guidance. I have a named Account Manager, Sneha Gurudutta, who keeps in contact with me and offers advice on line and on the phone... I'm really pleased with the service.”