Kinouchi

Becoming Self Employed by Paul Kerr

If you want to set up a company, you must seek professional help. Being self-employed is quite different.
How to register for self-employment:
To register, use the CWF1 application form which can be downloaded from www.hmrc.gov.uk. You need to register by the third month after you have started, but do it straight away. The day you start is the day you open your doors for business or when you receive your first commission. You still need to register as self-employed even when you’re under PAYE (Pay As You Earn).
National Insurance (2009-10 rates):
Class 2 Flat rate weekly £2.40 (small earnings exemption limit £5,075)
You need to pay National Insurance for 30 years in order to qualify for a full state pension
Class 4 Percentage of profits.
Tax rates (2009-10):
Personal allowance £6475
Basic rate 20% £1-£37400
Higher rate 40% above £37401

Record Keeping:
There are three steps to remember:
- Set up a system. Keep your system up-to-date. Retain your records for five years from the relevant statutory filing date.
- Records. What do you need? Business income, business expenses, bank statements, cash book, invoices and receipts, record the value of stock on hand and uncompleted work in progress.
-  On your accounting date, you need to keep a record of stock and take you car mileage. This can be any date e.g. 1st February- 31st January.
Tax returns will be filed to you on the 6th April each year. Paper returns must be filed by 31st October. Internet returns can be returned later (31st January) and it handily has a tax bill calculator. It also assures you with an online receipt and a view of your statement.

Useful links:
www.hmrc.gov.uk
www.businesslink.gov.uk
www.berr.gov.uk
08456032691 – call this number to be able to take part in free workshops.