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If you're self-employed, you have to fill in a Self Assessment tax return every year. Each April or May HM Revenue & Customs (HMRC) will send you a letter telling you to complete a tax return or a paper tax return.
You'll be asked for information about profits from your business and other income that you have to pay tax on - such as rental income. This is used to work out how much tax and National Insurance contributions you have to pay. You must provide the correct information and get it to HMRC on time.
You must keep records so that you can fill in your tax return fully and accurately. The more detailed records you keep, the easier it will be to answer any questions that HMRC may have.
You may decide to use an accountant, but Self Assessment is designed to be as straightforward as possible so that you can do it yourself.
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The tax and National Insurance contributions you pay depend on whether you're self-employed or an employee - so it's important to check that you really are self-employed. You're usually self-employed if you can answer 'yes' to the following:
You can be self-employed for some of your work, but an employee of another business as well.
You normally have to pay tax and National Insurance contributions as if you're an employee if
If you're still unsure whether you count as self-employed, follow the link below for more guidance. Or you can contact your Tax Office or the HMRC Helpline for the Newly Self-Employed.
If you're self-employed you should register for business taxes with HMRC. You can do this online.
When you've registered, HMRC will send you a Unique Taxpayer Reference and set up the right tax and National Insurance records for you. They will ask you to complete a tax return each year.
Follow the link below to find out how and when to register for business taxes.
Once you're registered with HMRC, you'll receive a letter, usually in April or May, telling you to when you need to send your first return. HMRC may get in touch earlier if you need to send a tax return back for a previous tax year. If you don't receive a letter or a tax return, you should contact HMRC.
It's best to complete and send back your tax return online. There are many advantages to sending the tax return online, for example:
If you're self-employed and you send a paper tax return (SA100), you'll also have to complete either:
If you stop self-employment, you still need to fill in a Self Assessment tax return for the tax year in which your self-employment ends. The tax year runs from 6 April to the following 5 April.
Show the date that you stopped being self-employed on the self-employment pages of your tax return.
If you receive a tax return the following year, and think you don't need to complete one, get in touch with HMRC as soon as possible.
The tax year runs from 6 April to the following 5 April.
You can send partnership and partners' returns on paper or online. The deadlines are:
The deadlines for paying any tax due are:
You may have to pay a penalty if you miss these deadlines.
You must normally keep your business records for 5 more years after the normal tax return deadline of 31 January. This date applies even if you've sent in a paper tax return.
You may need to keep them for longer if you send your return back late or if HMRC tell you they are checking your tax return.
Keep any information and documents that you may need to help you fill in your tax return or to make a claim. The records you'll need to keep depend on your specific circumstances.