In the UK, people who are employed by other individuals or by organizations are taxed based on the Pay As You Earn l (PAYE) mode. However, people who are self-employed pay their taxes themselves, and are usually required to submit their tax returns at the end of the financial year. It is therefore important that you have a good understanding of the process of registering with the HM Revenue and Customs so that you do not get penalized for delaying to do so.
Why You Need To Register
As already mentioned, people who are self employed do not pay their taxes based on the PAYE system. They are required to fill a tax return that will be used to determine the amount of money that they will actually be required to pay. Now, for this process to be smooth, it is important that you notify the HMRC so that they can put you in the register as one who is to fill one's own tax return. After the process of registration, you will receive certain details which will then be used in making sure that the information that you have provided them with is placed under the right taxpayer.
When To Register
Generally, it is advisable that you register with the HMRC as soon as possible, or immediately you change your status. This means that if you were employed by an organization or by the government and then you choose to become self-employed, you are required to notify the tax agency as soon as possible. However, since in legal terms "as soon as possible" is quite vague," it is generally advised that this date should not be later than October 5 after the end of the financial year. It is however worth noting that the registration process should not be undertaken in anticipation of your move to becoming self-employed. Not at all. Instead, it should be done only when you have already started out the business.
What You Will Need
Before you register with the HMRC as a self-employed person, there is some information that you will need. Most people do have most or some of the information even before they start the registration process. The first thing that you will need is none other than the National Insurance Number. This is available to most people who have worked in the UK. You will also need your contact details, your UTR number, and the date that you became self-employed.
If you would like to know more about Self Employed Registrationand other related topics, please visit http://beingselfemployed.org/
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