Why register Accountant For Self employed?
The requirements to disclose are a lot less than a limited company as you are only required to complete a Accountant For Self employed tax return once a year. Also:
– You are in control of the business and are entitled to all the profits
– You are the business and not an officer which you would be under a limited company.
There are no restrictions of withdrawing funds from your bank account compared to if you were a limited company director then you would be withdrawing as a salary, dividend, bonuses or a loan account.
Before you set up as a sole trader or self employed
Anyone can set up Accountant For Self employed, although certain type of work will require you to obtain a permit or a licence from your local authority, such as Taxi Driving, Child-minding or Street Trading. Setting up as a Sole Trader has some legal requirements you need to follow.
Planning to run your business from home? You may have to pay business rates for section of your home that you are using for business purposes. Depending whether or not you are using that part of the home for domestic purposes.
For example, if your work is online based and you work in your bedroom, it is very unlikely you will have to pay business rates because it is used for domestic purpose – but if you work in a separate room such as an office then you may have to pay business rates. You may need to bear in mind that you may need planning permission to work from home, depending on the type of business it is.
Any changes on your property for business reasons, such as a side extension for another access for your business or if your business will cause a disturbance in your neighborhood; then planning permission may be necessary. You can receive more information on business rates and planning permission from the planning department in your local authority as every area is different.
Who registers as self employed?
Registering as self-employed does not require a lot of administration like a limited company. However, you must register as self-employed by 5th October of the business’s second tax year of when you have started your self-employment or when you have started to trade. You may receive a penalty of £100 if you have failed to register and can increase after three months.
Contractors/Freelancers and people who own a Sole Trader Business are classified as Self-Employed. Contractors can be people who work on a contract basis, for example Builders, Plumbers, Electricians (CIS Tax), Locum GP’s and etc. You will receive a Tax Free code, which for the new Tax Year of 2020/2021 will be 1250L. If your income is over £100,000 then your personal allowance will be reduced. The personal allowance for individuals born before 6th April 1938 is £11850 for 2018-2019 tax year.