How and when to register with HM Revenue & Customs (HMRC)
It’s important to let HMRC know that you’re self-employed as soon as possible – even if you already fill in a Self Assessment tax return each year. If you don’t tell them, you may find yourself paying a penalty.
You can let HMRC know about your self-employment by registering online for business taxes. You’ll be asked for information about you and your business. HMRC will set up tax records for you using the information you provide, for example records for:
– Self Assessment
– National Insurance
– PAYE if you have people working for you
A Self Assessment Online account automatically will be set up for you at the same time, unless you say that you don’t want one.
Arranging to pay your Class 2 National Insurance contributions
As well as registering for taxes, you’ll need to arrange to pay Class 2 National Insurance contributions immediately.
The most convenient way to pay Class 2 National Insurance contributions is by Direct Debit.
Paying by Direct Debit has many advantages:
– It is easy to set up – just fill in the application form and send it to HMRC. You will need a suitable account at a bank or building society.
– It runs automatically – once set up, your Direct Debit will run automatically.
– It helps your budgeting – for people in business good cash flow and budgeting are essential. Direct Debit means that you have to plan for only one month’s payment in arrears.
– It gives you peace of mind – payments are made on time, every time – there is no risk of losing benefit because you forgot to pay.