If you’re self-employed, you may need to register with HMRC so you can be taxed on it. Failing to do so could result in penalties, so it’s important that you know how to register.
But what classes as self-employed? And how exactly do you register with HMRC as being self-employed? If you’re not sure, don’t worry – we’ve got you covered.
Read on to find out how you can register as self-employed with HMRC, as well as how to tell HMRC that you’re no longer self-employed.
Who Should Register As Self-Employed?
A self-employed person is somebody who is either a sole proprietor or an independent contractor. They’ll work for themselves instead of working for an employer. You can be self-employed in a variety of industries, from construction to marketing.
There are two main categories that self-employed people fall into – owning a business or selling their goods and services.
If you run a business, you classify as self-employed if you sell goods or services to make a profit (and charge an agreed price), deal with multiple clients or customers, run the business yourself, decide when/where/how you want to work, or can hire others at your own expense.
However, if you sell goods or services, you may classify as self-employed if you’re actively trading, earn a commission from selling products to others, get paid for providing a service, sell regularly to make a profit, or sell items online, over adverts, or even at car boot sales. This means that if you’re an active seller for profit on Depop or Etsy, then you’ll need to register as self-employed.
Many people get confused as to whether they need to register as self-employed, but if any of the above apply to you, then you’ll need to let HMRC know that you’re self-employed. Read on to find how to do so.
If you’ve recently become self-employed or started your own venture and you’re looking for expert start-up business advice, we can help you. Click here for more information.
How To Register As Self Employed
Registering with HMRC as self-employed is a quick and simple process. If you’ve determined whether you class as self-employed, head to the online registration portal on gov.uk. If you’ve not registered on gov.uk before, you’ll need to create an account using your email address and full name.
It’s quick and easy registering with HMRC – however, you’ll need certain information to hand to proceed. You’ll need to input information about your role, the date you started your business (when you became self-employed), and your personal information such as your NI (national insurance) number and your address.
Shortly after completing your registration with HMRC, you’ll receive a 10-digit reference number – your UTR (unique taxpayer reference number). You use this number to log into the gateway in the future, where you can submit tax returns, view Pay-E details, and update your details.
If you need assistance or somebody to take the stress of tax returns off your hands, we can help you.
When Should I Register as Self-Employed?
You should register as self-employed with HMRC as soon as possible. However, you won’t face penalties unless you miss the official deadline.
According to HMRC, you need to register by the 5th of October following the end of the tax year that you first became self-employed. For example, if you started your business at the start of August 2021, then you’ll have until the 5th of October 2022 to register.
What If You’re No Longer Self-Employed?
As well as informing HMRC when you become self-employed, you should also let them know when you cease to be self-employed – whether it be because you’ve stopped trading or you’re leaving a current business partnership.
You can let HMRC know that you are no longer self-employed by using the Government Gateway, or by writing to them.
Part of this process involves sending a final tax return, where you’ll need to include details of the business, the profits, and losses.
HMRC won’t know that you’re no longer self-employed unless you inform them – so they may send estimated bills and leave you liable for penalties. The estimated bills and penalties can only be rectified within three years, and will still require you to complete your tax return.
If you find yourself under investigation by HMRC, we can help you get things in order and give you all the advice you need. Click here to learn more.