Mslexia

Mslexia, the magazine for women who write | www.mslexia.co.uk

Essentials

Q: What do I need to do to go self-employed?

A:

◊ Before you go self-employed, put aside some savings to support you before the money comes in: a year’s worth is not excessive – you don’t want to starve.

◊ Tax matters are not as complex as you’d think. Begin with the ‘plain English’ advice on the HMRC website or phone the helpline (08459 15 45 15) to ask for guides on starting up in business and self assessment.

◊ You must register as self-employed (Schedule D, usually) with the Revenue (HM Revenue & Customs), and with National Insurance within six months from the ‘start of business’. Request a registration form, or complete it online on the Inland Revenue website.

◊ Over a fifth of what you earn (21-22 per cent) is taxed, so don’t treat earnings as ready cash. Piggy bank what you need: there are two payments to be made, in January and in July, based on figures from your Tax Return form covering the tax year that began in April. If you face cash-flow problems call your local tax office immediately to negotiate payment. Never be an ostrich!

◊ The Tax Return form arrives in April. It must be filled out by September 30 if you want the Revenue to calculate your tax (by January if doing it yourself).

◊ If earning more than £10,000 p.a. you may wish to hire an accountant (get a recommendation), who’ll know exactly what business expenses are allowable.

◊ Aim to keep a full record of income (invoices, pay slips, bank statements, royalties, advance payments) and outgoings (expense receipts). The Revenue requires adequate documentation (request ‘Keeping records: a quick guide’, or view it on the website here).

◊ Help with personal finance is on hand at the Motley Fool website www.fool.co.uk

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