Tax Returns- Self Assessment
Disclaimer: This are my views as a self-employment person. NOT as a financial adviser or tax expert. So please do check any information of yourself before acting upon any of this information.
I am not sure what the laws are in other countries, but in the UK, if you are self employed, you have to fill out a tax return by the 31st January and pay your dues by this dreaded dead line!
As per usual I have still got this joyful task to complete. I have been self-employed since 2010 (with a brief stint in 2005/6) and have 3 sources of income on my self assessment. Next year I will have 5 as blogging and writing will be on there (YEY!) I mention this as I super excited about these achievements.
If you are releasing earning money at all, regardless of profit you will have to fill in a self assessment form when due and declare to HMRC within 3 months of operation. The only exception to this is if your individual (not household) GROSS income falls below £11,500 this is the amount you are allowed to earn before you get taxed on it. (This is the threshold for income tax in 2017/2018)
When you start self-employment you fill in a tax return by the 31st January in the financial year AFTER you start. So, if you started after April the 5th last year, it will not be due until 31st January 2019.
You can claim for a variety of things and offset them against your tax. If you visit the HMRC site, they will give you more detail
National Insurance if you are self employed: 9% on profits between £8,164 and £45,000 2% on profits over £45,000 source
If after your expenses are deducted from your gross income, your net income is less that £11,500 you will not need to pay any tax. (Some people just reinvest the money back into the business, so no income occurs.)
Tax rates are: £11,501 to £45,000 20% £45,001 to £150,000 40% over £150,000 45%
This information is available from the HMRC self assessment sites.
I do self-assessments myself, my hubby has an accountant, it is entirely up to you which to choose.
Hope this helps any newbies to the self-employment gang.
