Simply Tax

What does it mean to be self-employed?

Right… let’s get one thing out of the way! Depending on who you’ve been speaking to, your mate Dave down the pub or Susie for a catch up over dinner, its important to first understand some of the terminology used.

Being self-employed is the official term as used by HMRC, but you may call yourself a freelancer, sole-trader or simply working for yourself (not under a company). By and large, all of these terms mean the same thing… in the eyes of HMRC, you’re self-employed.

How do I know if I am self-employed?

A couple of key signs or triggers to distinguish between being self-employed or not. Being self-employed:

  • You don’t receive a PAYE payslip from your employer and you’re not subject to an employment contract
  • You do some work, raise a bill, send it to your customer you get paid directly for that piece of work
  • Its up to you to declare your tax and NI

Telling HMRC that you’re self-employed

Being self-employed and notifying HMRC are two different things. You must tell HMRC if you are self-employed, unless you’ve made less than £1,000 during the tax year from your trade.

The process is quite straightforward to inform HMRC that you’re self-employed and once registered, that’s it! You just need to declare your income and expenses in your self-assessment tax return.

If registering for the first time, have your personal details to hand such as your email address, contact number, date of birth, NI number etc.

  1. Click here to and then click on “Register online”.
  1. Enter your email address.
  1. You will then be asked a few questions.
  1. Once done, you will be set up with a Government Gateway ID username and password via your email. You will also be sent a “Unique Tax Reference” (UTR) number in the post.
  1. You will also be sent a separate letter with a special activation code to finish setting up the online account.
  1. Once all set up, you are all set to go to complete your tax return.
  1. Make sure you keep records of your trade (details of income, expenses, equipment purchases etc.)

You can print out a form and send it in the post to HMRC by filling out a CWF1 or SA1 form – but this will take longer to register than completing the forms online.

Once you’re all set up with HMRC, click on the relevant topic below for further information:

  • What records to keep and how to keep them
  • Stop becoming self-employed and informing HMRC
  • Tax and National Insurance for self-employed

Sounds confusing? Don’t fall foul of HMRC legislation!

If you need to register as self-employed with HMRC, you must inform HMRC, register for and complete a self-assessment tax return. If not already registered to file one, you must do so immediately.

Create your account

Simple and easy registration to get you started, for our platform to complete your tax return.

Answer a few questions

Use our intuitive wizard and upload relevant information

We’ll handle the rest

We’ll let you know if any documents are missing. Leave the rest to us. We review, calculate, prepare and submit your tax return on your behalf.