If you are self employed, then sooner or later you will need to complete a self assessment tax return, and pay tax on your profits. So what do you need to know about tax for the self employed?
- One of the first things you need to understand is whether or not to register as self employed
- Chances are you will need to register. Its an easy thing to do, you can either call HM Revenue & Customs, or you can fill in a form online
- Make sure you have an understanding of the dates and deadlines
- Start tracking your numbers. You need to understand whether you are making a profit, and if you are making a profit you should consider putting some money aside to cover your eventual tax bill
- Maintain adequate books and records
- Have a look at the personal tax allowance and thresholds to get an idea of when you will have to start paying tax and National Insurance Contributions, and how much you will have to pay
- Check out what expenses are tax deductible for sole traders
I have too many conversations with small businesses who are in a panic because they are about to miss a key deadline and they don’t know what to do. Make sure you’re not one of them – get yourself organised in good time. After all, tax doesn’t have to be taxing…
If you want some support without having to pay full accounting fees then check out my Sole Trader Support Package, ideal when your business is just getting started.