Registering as self employed
If you're self-employed, you pay Income Tax and National Insurance on what is known as 'taxable income'. Taxable income is mainly the profits you make from working for yourself (whether as a sole trader or partner). You pay tax not on the entire income of your business but on the difference between that income and what you spend on the business.
If you're a sole trader or a partner in a business partnership, you need to complete a Self Assessment tax return. Before you can do this, you need to register for Self Assessment with HM Revenue & Customs (HMRC). This is so that the correct tax and Class 2 National Insurance contribution records can be set up.
Once you've registered, HMRC will send you a Self Assessment Unique Taxpayer Reference which you'll need to quote whenever you are in contact with them. The following April HMRC will send you a Notice to complete a tax return.
The deadline by which a tax return must reach HMRC is different depending on whether you choose to send your tax return in on paper or online. If you choose to complete online you can use either the free HMRC service or commercially available software.
There are late filing penalties if you don't send your tax return in on time.
You may want to consider appointing an accountant or adviser to look after your tax affairs for you. The HMRC website will provide a form for you to do this.
To find out more, and to register, please visit http://www.hmrc.gov.uk/sa/register.htm|