When do I register as self-employed?

DaveStokie

I've been thinking about starting to work for myself but, having looked at various websites, I can't tell when I need to register as self-employed with HM Revenue & Customs.

Looking on smarta.com/advice/accounting-and-tax/tax/when-do-you-become-self-employed and other websites/forums it says:

"When to register

You need to register as self-employed as soon as you are actively seeking work for your business. It doesn't make any difference whether you start bringing in money the next day or three years down the line - it's looking for work that counts.

You need to register at this point whether you are employed in another job or not.

If you don't register within three months of the end of your first month in business you could face a fine of £100."

The HMRC website says I need to register as soon as I start work, but I've found nothing clear about the three months.

It seems contradictory as registering as self-employed as soon as you are actively seeking work and registering within three months of the end of your first month could be almost four months apart!

If I start to look for work and it isn't successful I feel that HMRC would start to ask questions. If I don't register soon enough I could end up with a £100 fine which could wipe out any profit I make.

So, the question is: what do I do?
Do I register as soon as I can, or start advertising and test the market first, or something else?

Thanks for reading.
Dave.

Kayalana99

I told HMRC that the first date I sold something was the day I started my business...techinally thats not true as all planning before hand, getting everything set up...but they won't know any differnce.

If you start advertising is it going to cost you? If you don't make a profit in the first year of business its complety normal so if your spending money out I would count that as first day of business (for HMRC purposes)

Its up to you though but basicly as long as your start date is in line with your book keeping and isn't past the 3month mark you won't get hit with the fine.

If you ended up paying £1,000 on advertising that got nothing back and closed the business down HMRC would be fine with that, and perhaps even give you a tax break on the £1,000 you spent (although maybe someone abit wiser could agree/disagree on that as I am no accountant!)

antrobus

DaveStokie wrote: »

...If you don't register within three months of the end of your first month in business you could face a fine of £100."

The HMRC website says I need to register as soon as I start work, but I've found nothing clear about the three months.

...

That's because there used to be a £100 fine if you failed to register within three months, but that was abolished in April 2010. But as you have found, a lot of people haven't noticed this yet.

The blunt answer to your question is, whenever you like really. It's just that the longer you leave it the more likely you are to find yourself lumbered with fines and suchlike for the late submission of tax returns, late payment of tax really, etc. So it's generally a good idea to do it as soon as possible.

Kayalana99

Are you sure its abolished? No ones probally noticed it if it has because its still on all the HMRC sites as what will happen if you don't let them no.

Got it: Www.HMRC.gov.UK/About/new-penalties/Failure-to-notify.pdf

FYI dave thought of something else...you don't have to submit your book keeping till next year as all the money you make will be in this tax year april-march(October 14? Jan 15? Not sure exactly what that deadline is to submit this years books)...so even if you do register now they won't start asking questions because they won't need to untill next year (even if they did!) but as long as you open and close down your business if you give up you can do it all online and I doubt they will even contact you about it.

Bare in mind some people have to register as self employed for one job they do, and then never use it again other then to pay that one jobs tax.

Its complety normal.

_Andy_

Have you rung HRMC and asked?

DaveStokie

I'm hoping to advertise for free on a few websites or freelance websites such as people per hour which is suggested in the boost your income section on this website.

I don't plan on spending a lot of money - just using thing I already have - so I should be making some profit. That is providing I get the work!

Thanks for the link Kayalana99, but the example they use is April 2009, so does anyone know it it is still current?

Is the 3 months any to do with VAT or is that different?

I'm very unlikely to need to pay any tax, but get the impression HMRC will fine me for not letting them that I don't need to pay them!

I never realised people register as self employed to do just one job. Do mean for one job that lasts one day or do you mean a contract that lasts a few weeks or months?

_Andy_

"so does anyone know it it is still current? " - have you rung HMRC and asked?

Kayalana99

DaveStokie wrote: »

Thanks for the link Kayalana99, but the example they use is April 2009, so does anyone know it it is still current?

Is the 3 months any to do with VAT or is that different?

I'm very unlikely to need to pay any tax, but get the impression HMRC will fine me for not letting them that I don't need to pay them!

I never realised people register as self employed to do just one job. Do mean for one job that lasts one day or do you mean a contract that lasts a few weeks or months?

Think about it like this, Im employed but I find a really rare item at a car boot sale so I buy it and resell it for say...£2,000 profit (I know its unlikey but it could happen. )

Because I have brought to resell it counts as a business transaction meaning I would to tell HMRC, I would register as self employed through the website then close the business down as it was a one of transaction and then paying the tax.

I don't think you should worry about this 3months thing untill you start spending/making profit as they can't trace something thats not thier.