Been self employed for 10 months. How to pay tax?

JoeyJoe

I was hired as a contractor on April 6th 2016, and have worked self employed, sending invoices to my employer for those 10 months while they sorted out PAYE as I am the first employee. I am now on PAYE, but don't know what I need to do to pay the 10 months tax I owe.

I read that I have until October in my 2nd year of being self employed before I needed to register. However I no longer need to register now as far as I can tell.

I would have done this before Jan 31st, but had always thought I had until April to do it.

I have money saved up to pay the tax, I just need some guidance knowing where to pay it? My invoices are simple, I don't have any receipts to claim back from as it was only from one company. Amount is roughly £2000 a month in 10 payments.

Thanks

Joe

booksurr

obviously you will need to do a tax return
https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed

it sounds rather suspect however that you were taken on as an employee after 10 months. What significant change happened that made you an employee? It would be wise to have researched and rehearsed your explanation as to how you were genuinely self employed...

JoeyJoe

Not sure what you mean exactly, but I joined the company as the first employee, the others are partners. I was leaving my other company I were on PAYE with due to stress and they said they would be able to hire me as a contractor for 6 months before going PAYE. Although it over ran while they got everything together and worked out what they needed to do.

agrinnall

What booksurr is getting at is that in most cases you can't just decide whether you are self employed or an employee, the circumstances dictate it. And in this case you switched from SE to employee without any apparent change of circumstances, so HMRC may decide that you were an employee for the whole time.

https://www.gov.uk/employment-status/selfemployed-contractor

JoeyJoe

What happens if they decide that? Do I just have to pay a different tax?

Pennywise

JoeyJoe wrote: »

What happens if they decide that? Do I just have to pay a different tax?

Not your problem. Make sure you declare the income and pay your tax and HMRC won't coming knocking at your door. It's your "employer" who HMRC would go after for the shortfall in tax and NIC as it would have been their mistake that they paid you as self employed when they should have put you through the payroll from month 1. Although in reality, if the situation has been rectified, it's highly unlikely HMRC would pursue the issue, especially for a relatively short period of time.

booksurr

Pennywise wrote: »

Not your problem. ... it's highly unlikely HMRC would pursue the issue, especially for a relatively short period of time.

whilst I agree with the latter, surely if OP claims self employment expenses to arrive at his taxable income then it could be his problem, however small, since he may not have been entitled to them and so would underpay his tax?

JoeyJoe

I don't have any expenses at all.

booksurr

JoeyJoe wrote: »

I don't have any expenses at all.

All self employed people have expenses, that is the whole point of being self employed, your costs of doing the work fall on yourself eg: producing invoices and keeping records have costs. It is impossible to be self employed and not have costs, although they can, of course, be small.

JoeyJoe

The only thing would be lunch but I never got receipts. There is nothing else I have had to pay for. I live 1.5 miles away.

Arleen

You didn't travel? Didn't use electricity? Didn't need to buy any equipment? It doesn't sound right at all, so you may want to point your boss to the selfemployed-contractor page from before.

Edit: You can almost never expense food anyway.