If you work for yourself, self assessment is the simplest way to pay tax. If you haven’t already, registering with HMRC online is quick and easy. You need to submit a self assessment tax return once every year. The tax year runs from 6th April to 5th April the following year. The information you need to submit is the total sum of your earnings, minus any business expenses. You then have until 30th January, following the tax year ended on 5th April, to file your tax return and pay any tax that you owe.

Self employed workers are entitled to a tax free allowance. You start paying income tax on any amount you earn over this threshold. Which is why it pays to maintain tax efficiency. The types of expenses you can claim are controlled by HMRC who place restrictions on what they consider to be legitimate business expenses. We are the experts at calculating exactly how much you can include in your allowable expenses, helping you make the most profit out of your business and avoid paying too much tax. We will keep your accounts compliant, which means that if you are ever subject to a tax investigation, your figures will be legitimate, legal and provable. A tax investigation can be triggered by unusual activity, or you can be chosen at random. But don’t worry because we’ll have you covered. 

If you are self employed but you earn over £50,000 a year, you will be better off registering a limited company. Even if you earn nearly this amount, it could be time to change how you are registered, to make sure you are not overpaying tax that is your rightful income. There are other taxes to take into consideration if you hire employees which is true whether you are self-employed or a limited company. We can offer guidance if this applies to you.

Another consideration is that self-employment offers no real legal protection. This means that if someone takes legal action against you, your personal finances are put at risk. Whereas registering a limited company offers limited liability, which means your business is a separate legal entity and any legal action would be aimed at your business’s assets, rather than yourself. We can help advise you in this area.