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Do I need to tell HMRC when I start and stop self-employment?

Self Employed in Business Accounts

Yes, HMRC stipulate you should register at the earliest opportunity. However, the deadline is you are legally obliged to register by the 5th October of your business’s second year trading.

In order to register, you’ll need a Government Gateway account. This account grants you access to the government’s range of online services, you can get your Government Gateway login here.

After registering, you’ll receive your Government Gateway details by post. You have 90 days to use your login details for the first time. Once you’ve done that, return to the link above to complete your registration. You’ll need to give some basic details about yourself and your business, including contact details and the nature of your work.

so that they know how much you’re earning and can properly collect tax. So how do you know if you’re self-employed?

HMRC offers a tool called the Employment Status Indicator which can help you decide.

Once you’ve registered, you need to fulfill a series of key legal obligations.

The most important of these is that you must keep adequate records, particularly of any sales or outgoings connected with your business. Then, by 31 January every year, you must file your Self Assessment tax return. Bear in mind that you will need to make payments to HMRC on 31 January and 31 July, although you may be able to stagger these payments with the prior agreement of HMRC. As well as income tax, you’ll have to pay both Class 2 and Class 4 National Insurance Contributions (NICs).

If your annual turnover is above the VAT threshold (£85,000 for the 2018-19 tax year), you must register for VAT. However, you may choose to register even if your turnover is below this level.