Do I need to do Self Assessment for Tax?

scotland22

I started working for myself properly in August of last year (august 2009) due to being out of work (i actually did a little work for myself after being made redundant in May of 2009 but it was not something i was looking to do at the time and thought it was just some extra money until i found a job - but took it serious at the end of last year due to shortage of jobs out there at the time and increase in work for myself) and although im not making a great deal of money yet, i keep seeing the ads on tv for self assessment, however when i've gone on to the hrmc website it mentions self assessment for the tax year 08-09 (i could be wrong) however i was employed during that time and therefore im not sure if i need to do a self assessment yet as im still in my first tax year. i hope that makes sense.

Also, i have just ordered a website which i require for the type of work i do since i plan on taking it serious now, which is over £5000 (i know thats a lot for a website, but it is a specialised website for the type of work i do) which is likely to put me at a loss for the next month or two until i build up clients.

I did go along to some local tax workshops in the evenings but it turned out to be such a sham as they were never open - something to do with security guards never turning up) so i never managed to learn anything much about tax.

Also, i do not plan on keeping anything withheld from the tax office but have chosen not to register with them as being self employed just yet as like i say, i never actually wanted to go down this road but was forced into it by lack of available jobs in my area -but would still be filling out my self assessment for any money earned even if i started employment (i hope that makes sense).

so thats the jist of it, do you think i need to do self assessment on the 31st of this month then? What should i do next (i know absolutely nothing about tax and dont know where to go to get the information i need)

[Deleted User]

You wont need to complete a self assessment this year but you should register as self employed.

Extract from https://www.hmrc.gov.uk -

Register as self-employed

You can go on-line to register. First steps to register as self-employed.

You can telephone the Newly Self-employed Helpline on 0845 915 4515

You can download and print an application (PDF 201K) to post to HMRC.

If you have an agent who will be completing the form for you, you must first ensure that you have signed a form 64-8: Authorisation your agent, which gives formal agreement for your agent to act on your behalf.

Before you register as self employed, you may want to look at the following:
Self Employment and Self Assessment
Being self employed means you will need to complete an annual Self Assessment Return. This page answers frequently asked questions on this subject.

Starting up in business
These pages aim to help you understand some of the many things you need to think about when you're running a business, especially the main tax and National Insurance issues.

Show me all

System

By failing to register with HMRC as self-employed within 3 months of starting you will now incur a £100 penalty

You do not have to complete a tax return by 31st January 2010 as that is the deadline for the 2008/2009 tax year. You commenced self-employment during the 2009/2010 tax year which has not ended yet and so you will not be required to submit a return until 31st October 2010 (paper version) or 31st January 2011 (online)

PlutoinCapricorn

If you explain to HMRC that you started out thinking of it as pocket money, but have just started to take it seriously, and give a more recent date as the official start date, you can escape the penalty. All the more as it is the truth. HMRC know that there may be a warmup and preparation period and they don't like you to register until you have proved that you can earn something.

You have many months to learn how to fill in your self-assessment return, rather than doing it in a big rush.

www.businesslink.gov.uk can be very helpful - the name of their Scottish equivalent is on their website.

Rolo_Tomasi

Pam17 wrote: »

By failing to register with HMRC as self-employed within 3 months of starting you will now incur a £100 penalty

Don't worry, this is no longer the case - you now have to register within a reasonable time. However you will owe class 2 national insurance (£2.50ish per week) from the date you started.

If you are completely naive about tax/running a business I would recommend appointing an accountant - that way you can concentrate on what you are good at and let them do what they're good at.

System

This HMRC leaflet is useful for someone starting out as self-employed

http://www.hmrc.gov.uk/leaflets/se1.pdf

You can download it and use the form at the end for registering if you prefer to do so on paper.