Self Employment I'm confused.

tawecdl

Can anybody help me with a few queries please?

I started working for a company but on a self employment basis. I have registered as a sole trader and awaiting my tax number...

How and when do I pay my tax and national insurance?

what can I reclaim in regards to tax paid? and do i need receipts, diary? I honestly havent got a clue...

Is there anything else I should be careful of?

thanks in advance

InsideInsurance

tawecdl wrote: »

I started working for a company but on a self employment basis. I have registered as a sole trader and awaiting my tax number...

How and when do I pay my tax and national insurance?

what can I reclaim in regards to tax paid? and do i need receipts, diary? I honestly havent got a clue...

Is there anything else I should be careful of?

Others will come along soon to say that you may not be self employed irrespective of what your contract says but Ill let them get on that soap box.

National insurance is part of the registration process, assuming you dont get small earnings exemption (under £5,800 or such), then you pay a fixed amount for your Class 2 national insurance every 6 months based on a weekly amount - £2.75 from memory.

Annually you will do a tax return which, if submitted online, is done by the end of January after the end of the tax year. So assuming you started work after 5th April this year then your first tax return is due by end of January 2016

From the data you put on there the rest of your tax/ni etc is calculated and paid.

You dont "reclaim" anything, you simply put your revenue on the top line and the allowable expenses on the middle line and the form calculates your profit (or loss) as the bottom line. What are allowable expenses will vary but predominately you are talking about an expense that is paid purely for doing the business. If you make capital purchases, ie something that still has a value after buying it (eg a computer) then things are more complex as you cannot always deduct its full value in one year but must depreciate it over 3-5 years

lazer

Is it construction or non construction you work in, as there are different rules for both?


Keep a record of everything you spend and everything you receive relating to work.


Using a separate credit card or bank account helps.


HMRC have a few webcasts on self employment - and some useful leaflets. Have a look here


https://www.gov.uk/self-employed-records/overview

tawecdl

Thank you so much for your response. I started monday 6th october. I get paid a set amount weekly from a company direct into my bank, well i will do next week. I just dont know if theres things I should be doing right now that I am not doing? should i keep petrol receipts? food receipts etc?

InsideInsurance

tawecdl wrote: »

Thank you so much for your response. I started monday 6th october. I get paid a set amount weekly from a company direct into my bank, well i will do next week. I just dont know if theres things I should be doing right now that I am not doing? should i keep petrol receipts? food receipts etc?

You should be keeping evidence of anything you intend to claim was a business expense. HMRC generally has 6 years to query anything and so you either need to set up a good filing system or digitize them all