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:
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.
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:
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.