Im surprised this hasnt been mentioned already on the forum (I did check
heh).
If you are over 16 (of course) and offering services for payment,
by law you need to register as Self Employed with HM Revenue and Customs.
If you do not register within 3 months, you can be charged fines/penalties for late registration.
The
Starting up in Business section of HMRC's web site provides full details of how to register and provides details of the main tax and National Insurance issues involved in running a business.
In summary, you need to keep all records relating to your business; more information regarding this can be found at
Set up a basic record-keeping system | Business Link.
It is vital you keep records for upto at least 6 years by law.
When you register as self-employed you will be required to pay National Insurance (Class 2) like you do in an employed job (Class 1). If your expected earnings for the tax year (April to April) are less than the stated HMRC figure, you can apply to not pay contributions on the grounds of having small earnings.
More info can be found here
HM Revenue & Customs: National Insurance
and here
http://www.hmrc.gov.uk/forms/cf10.pdf
You will also be required to complete a Self Assessment Tax Return. Note : this is NOT proof of self-employment, anyone can complete a Tax Return.
In the year you register, you will be sent a form automatically from HMRC to complete and return.
For example, you register Sept 2007, recieve a form April 2008, return it to HMRC by Sept 2008 they will calculate it for you, billed for tax in 2009.
Anymore information I will be happy to help, as I've served as a civil servant for over 5 years and continue to do so. I am trained in Self Employment Services, NI Deficiencies, Pension Credit, Child Benefit, Tax Credits and some Home Responsibilities Protection.
Thankyou come again
