How to register as a Sole Trader (self-employed)

The process of registering as a sole trader (i.e. becoming self-employed), is simple in theory.

Officially you’re setting up a type of one-person business. But there’s not much bureaucracy as you are a person and a business at the same time. There are no big legal issues to deal with.

Having said this, the registration pages have changed a little bit, which can be confusing in practice.

Posted on 04 June 2024

Why HMRC is plugging its new NI gap-filling tool

Everywhere I look these days someone is telling me to check my National Insurance record.

I’ve discovered why…

Posted on 20 May 2024

The bizarre world of VAT tweaks and small businesses

One of the smaller announcements by Jeremy Hunt in his budget announcement (6 March 2024) was that the VAT threshold is to be raised by £5,000.

It is £90,000 per year from 1st April 2024.

This refers to the threshold of 12-monthly turnover at which a business, including sole traders, must become VAT registered. If they don’t register at that point they attract a penalty charge.

So what?

Posted on 08 March 2024

Fiddling with your National Insurance

Figures below were correct as of 8 March 2024

More changes to National Insurance (NI) were announced by the Chancellor Jeremy Hunt on Wednesday (6 March 2024).

As it happens, I was training at Channel 4 that day, so we were able to look at how NI was at the beginning of the day, and after lunch compare it to the announced changes.

Posted on 08 March 2024

Changes to national insurance for freelancers of all types

It was Jeremy Hunt’s turn in the spotlight on Tuesday 22 November 2023.

As Chancellor he was making an autumn statement about upcoming changes, including to some taxes.

The most significant change is to national insurance contributions, which are a kind of tax for working people.

Posted on 24 November 2023

New help sheets for freelancers – agreeing work and getting paid

Anyone who’s been on one of my courses will know that I have collected together a dozen ‘help sheets’ on different topics that are useful for freelancers.

Posted on 03 November 2023

How much should you put aside for tax?

If you’re new to being a sole trader (ie registered as self-employed), it can be a bit daunting that people pay you without making any deductions for tax and National Insurance (NI).

You know you need to pay tax later, but how much do you put aside?

Posted on 02 October 2023

Start planning now for your next tax bill

There are two stages to paying income tax when you’re a sole trader:

1. Tell HMRC about your turnover and expenses in a self-assessment tax return
2. Pay any tax you owe

In between these you will receive a tax bill from HMRC.

You can submit your self-assessment tax return as soon as a tax year finishes on 5th April.

Posted on 31 August 2023

Introducing a new ‘use of home’ calculator for Sole Traders

I’ve had a couple of emails at the tail end of August, asking about how certain expenses are calculated when sole traders are doing their self-assessment tax return.

One area that always causes confusion is the ‘use of home’. People usually know that something is offset-able for heating and lighting, but how is this calculated? And what else can be included under ‘use of home’.

Posted on 31 August 2023

Self-employed roles in production – updated ‘agreed list’

It can often be confusing trying to work out which jobs are likely to be paid as self-employed, and which as PAYE.

Generally speaking it’s roles where people have their own tools, or where HMRC thinks you have to show “rare skill and judgement”, a jargon phrase that always brings a wry smile.

A good starting point for clarification is the list of job roles agreed between HMRC and the production industry, including unions like BECTU.

This is sometimes called the ‘agreed list’ or ‘appendix 1’.

Posted on 01 August 2023