Newly Self Employed Van Driver

Nburgan77

Good afternoon everyone.

Great forum, with some really great advice. I have searched through it to try and find the advice I'm looking for, but can't seem to find the correct answers so I'm really hoping someone will be able to assist with the advice I need.

I've recently moved back to the UK after spending 30 years in South Africa and have started working as a self employed courier driver. I started in October on a rate per delivery, and have recently moved to a higher rate, but now I am paying for the van, insurance and fuel.

A couple of questions:

1. Do I need to do a self assessment before 31 Jan 2021?
2. If no to the above, do I need to register as self employed right away?
3. Do I need to be VAT registered right away?
4. Is there anything else I need to do to avoid any possible penalties?
5. What kind of percentage should I be saving for the taxman on a monthly basis?


Thank very much!

[Deleted User]

1. No
2. No, by 5th October 2021.
3. Know nothing about VAT
4. No, but keep good records.
5. My mantra was 30% if a basic rate taxpayer to cover tax and NI and have a surplus, more depending on how much tax was payable at 40%.

Jeremy535897

1. If you started self employment in October 2020, your first year of self assessment is 2020/21, which must be filed by 31 January 2022.
2. You need to register as self employed by 5 October 2021, but it would be better to do it now. See https://www.gov.uk/register-for-self-assessment/self-employed
3. You need to register for VAT if your turnover will exceed £85,000 a year. You can choose to register for VAT voluntarily if this would be beneficial (if all your customers are VAT registered, for example). See https://www.gov.uk/vat-registration
4. You don't need to worry about penalties once you have registered as self employed, and so long as you file your returns and pay your tax on time.
5. It depends on what profit you expect to make. Over £9,500 annual taxable profit, national insurance is 9%, and over £12,500 taxable income, basic rate is 20% (NIC reduces to 2% at £50,000 profits, higher rate tax at 40% applies when you have taxable income over £50,000, assuming you live in England).

The attached guide is useful for those starting self employment:
https://www.litrg.org.uk/tax-guides/self-employment

Nburgan77

Perfect, thank you very much, I will look into the links provided.