Registering as self-employed...

chuckyhen

Hi,

I'm going to register as self-employed this week, but before I do I just have a couple of questions:

1. I am waiting on confirmation from Abbey about my business bank a/c - will HMRC need these details?

2. Do my weekly NI contributions come out of my business bank a/c and if so will these be taken as soon as I register with HMRC or is there a grace period? If not I'll need to wait for Abbey to confirm a/c details.

3. HMRC - online application or speaking to someone? I know it's the same result but how helpful were the people you spoke to at HMRC?

4. Applying to fill in tax return self-assessment online - do I do this separately or is it all part of the application process?

Many thanks in advance.

Chuckyhen

Horace

Hi

Ring up the HMRC - they're really friendly and helpful. You register with them for NI contributions too, however, you can apply for an exemption certificate which is something that I have done. NI contributions will be taken from your business account. Ask them about the unique number for online self assessments. With regard to your business they will most likely send you a form to complete and on there you put your bank details.

The HMRC will send you a self assessment form in April next year - you can either complete this oniine (you have to apply to them for a unique number to allow you to do this) or you can employ an accountant to do it for you and when you receive your unique number who give this to your accountant.

The HMRC also run free courses on how to complete your self assessment.

HTH

fengirl_2

In answer to your questions:
1. No, they dont need your bank details.
2. Its usual to pay these from your personal account as this is a personal expense. You are liable as soon as you register, so dont register until you have your first income.

JanineB

I signed up today as I started doing online surveys the other week. Could be ages before Im paid though. I explained trhis to HMRC and filled in the small earnings form.

Ive been working full time since the start of the year and made over my personal allowance but I'm quitting work this Friday and going back to uni as a full time student so hopefully wont have to pay NICs as I dont have the money to pay that each week. I'll prob earn less than I need to pay anyway!

I'll see what happens.

Good luck with registration.

fengirl_2

I think you have been a bit rash in registering as self employed. It does not sound as if you are liable to either tax or NIC, so you have got yourslef in a system which is hard to get out of for no reason.

JanineB

Well some of the other boards on this website stress the utter importance of registering for this. So rather safe than sorry I'd say.

I also carry out the odd bit of mystery shopping, modelling and extras work so whilst I wont be making a lot I should be declaring it as it's untaxed work. I dont want to have them on my back as Ive had them before with eBay when I was only 16 (I was having a clear out and they were calling me at home trying to say I was a business even though I wasn't - I was still at school and selling old clothes and CDs loll!) and they're hard to get rid of.

I called them up last month and they told me to register asap.

So far Ive nothing from S/E paid into my bank yet but Im unemployed as from Friday so Im going to ham it up and hopefully make something from this.

I have lots of friends that do promotions and modelling work and they say that pay no tax etc and claim back lots on expenses, so shouldnt matter too much HOPEFULLY. You've scared me now though!

fengirl_2

Yes, you need to register as self employed if you are liable to tax or/and NIC. But if you are liable to neither, there is absolutely NO POINT in getting yourself in the system. You have earned nothing so far and there is no gaurantee of you earning enything sand yet now you are signed up to filling in a pointless form every year.

JanineB

Well I will be earning something shortly......... I'll need to or I wont be able to eat! lol.

According to HMRC if you earn ANYTHING you have to declare it said their lovely phone staff last month.

I've already used up my personal allowance for this year from working full time up until now so how am I not liable for any tax and NI? Please explain this to me as you seem to know about all of this. I would be thankful.

I'm not bothered about filling in a form. As long as I don't end up paying when I don't need to. I filled in an NIC exemption form as I don't expect to earn much.

Why would they tell me to register self employed if I don't need to? Doesn't make sense.

Please have a look at my post here: http://forums.moneysavingexpert.com/showthread.html?t=1880113

No-ones ever replied to it. I called and basically said all this to HMRC and the said to register so I have.

I have made such earnings in the past and didnt declare them as I didnt think I had to as I didnt make a lot (last tax year I made about £200 or so as I was mostly working 9-5 and had no time for other things) but having started comming on here, people are declaring everything to avoid being fined so I though I'd better start.

Thanks

fengirl_2

You can't have used all your personal allowances up as we are only part way through the tax year and the PAYE system works on a month by month basis.
The staff on the helpines are not the fount of all knowledge. They get 10 weeks training as opposed to 18mths when I was a baby tax inspector. If faced with someone saying they are self employed, they dont question the fact, they are just trained to register them. The law is quite clear - you have to notify chargeablity, ie tell HMRC if you are liable to tax. If you are not liable to tax, you dont tell them. If you went to work for an employer earning £80 a week, the employer would not need to tell HMRC, the same goes for a self employed person. If, however, you have a full time job and are working as self employed as well, then of course you are liable to tax and you need to register.
I certainly would not register until I was certain that my business was bringing in money - I have seen so many people who set up in business expecting it to be a sucess and then find they have to give it up after a month.

JanineB

Well thats 10 weeks more training than joe public i.e. the rest of us get.

If it doesnt bring in any money then I've not lost anything, I'm only trying. If I dont need to pay anything then fine. Having to fill in one form to say I've made small earnings every year does not phaze me.

You keep saying "liable for tax" How am I supposed to know if I am liable for tax? Is there some kind of threshold or clause? No-one's ever explained this to me.

I pay tax on my wages and I'm told everywhere any money your earn you need to declare even if you only make a tenner a year. Ive asked this on here God knows how many times and everyone keeps saying "oh you'd better register.......".

After all, I'd the taxman on my back after making £50 on eBay so what sort of signal does that give out?

As you are/were a tax inspector, what would you suggest I do? You keep saying I have done wrong. How do I fix this then?

fengirl_2

The tax free allowance for the currect year is £6475. This allowance is announced each November in the pre-Budget report and is also on the hMRC website.
If you made £50 on Ebay and had other employment, then you would be liable for tax and should have declared it. However, if you earned £50 on Ebay and had no other income, then you dont declare it because this is coered by your tax free allowance.
As you have now registered as self employed, there is nothing you can do. You will be self assessing each year, but as you say this does not phaze you, there is no problem.