If you start working for yourself, you are classed as a self-employed sole trader.
As a sole trader, you run your own business as an individual and you can keep all your business’s profits after you’ve paid tax on them. What you take from the business is classed as ‘drawings’.
You will need to send in a Self Assessment Tax Return each year; which of course we can take care of.
You will be taxed on the profits of the business. There are also 2 types of National Insurance that you will need to pay if you are self-employed, Class 2 and Class 4 NIC. However if your profits are very low, say for the first year of business we can apply for a class 2 exemption as long as profits are below the current threshold limit.
Special rules for specific jobs
Some self-employed people don’t pay National Insurance through Self Assessment, but may want to pay voluntary contributions. These are:
• examiners, moderators, invigilators and people who set exam questions
• people who run businesses involving land or property
• ministers of religion who don’t receive a salary or stipend
• people who make investments for themselves or others – but not as a business and without getting a fee or commission
Partnerships
When you set up a business partnership you need to:
• Choose a name
• Select a nominated person (responsible for keeping records etc)
• Register with HMRC (which we can do for you)
You can use your own name or trade under a business name, however both partners names must appear on all official paperwork.
The partnership must be registered with HMRC along with each partner. Partners will pay any Tax/NIC through Self Assessment.
We can complete all partnership and self assessment tax returns on our specialised software.
Records must be kept for 4 years after 31st January following the end of the tax year
Please contact us to discuss any of the above.
