How to register yourself as self employed
If you are new to self-employment you must register with HMRC for a UTR (Unique Tax Reference) number to confirm you are eligible to work in this manner. If you fail to register within three months of taking up your first assignment you may incur a penalty of £100. If you do not register at all you will be breaking the law and could be liable for further penalties.
To register you must complete the following forms:
- FORM CWF1 – Becoming self employed and registering for National Insurance and/or tax
- FORM CA5611 – Application to pay National Insurance contributions by direct debit
These forms can be obtained through the HMRC website (although the direct links are above) . If you need assistance with registration call the National Insurance helpline number on 0300 200 3505.
Your self-employed status means you have to make your own National Insurance Contributions (or NIC for short) to HMRC, and paying these by direct debit is the easiest method. You will be responsible for Class 2 NI, currently £2.50 per week. Depending on how much profit you make in the year you may also have to pay a small amount of Class 4 NI.
Once you are registered you should receive an HMRC self assessment tax return sometime in April of each year. You will have until the 31st of January the following year, at the latest, to submit your return. Please contact us on 020 8643 9633 if you need professional help to complete the return.
Our payroll solutions mean you receive your self employed income net of tax. You will therefore need to put aside a portion of your earnings each month to meet this tax payment when it becomes due. We recommend setting aside approximately 25% of your income in anticipation of that tax bill.
Sole Trader Premium customers
If you are a Sole Trader Premium customer, we will register you as self employed and for National Insurance Contributions as part of your package. We will also provide you with regular statements advising how much money to put aside to cover your tax liabilities.