11 STEPS TO SETTING UP AS A SOLE TRADER (SELF-EMPLOYED) - Post 5

ITEMS TO DO BEFORE TRADING Cont'd

6. REGISTER FOR SELF ASSESSMENT TAX RETURN

WHO MUST SEND A TAX RETURN

In the last financial year between 6th April to 5th April (i.e. 6th April 2019 to 5th April 2020), you were:

· Self-employed as a ‘Sole Trader’ and earned more than £1,000

· To prove you are self-employed, for example to claim Tax-Free Childcare or Maternity Allowance

· Claiming for Income Tax Reliefs

Overview

‘Tax relief’ means that you either:

· pay less tax to take account of money you have spent on specific things, like business expenses if you are self-employed

· get tax back or get it repaid in another way, like into a personal pension

You get some types of tax relief automatically - but some you must apply for.

When you can get tax relief

Tax relief applies to pension contributions, charity donations, maintenance payments and time spent working on a ship outside the UK.

It also applies to work or business expenses – you may be able to:

· get tax relief on what you spend running your business if you are self-employed (a sole trader or partner in a partnership)

REGISTER IF YOU’RE SELF-EMPLOYED

If you qualify for having to send a tax return and did not send one by the previous 31st January, you need to register for Self-Assessment and Class 2 National Insurance.

You need to register by 5th October in the second year of your business, you could be fined if you do not.

REGISTERING FOR THE FIRST TIME

You will need to register online on competition HMRC will do the following

· Send a letter containing your 10-digit Unique Taxpayer Reference (UTR)

· Set up your account for the Self-Assessment online service

· Send a letter with an activation code for your online account which you should receive with 10 working days. Use the activation code the first time you log into your online account.

SENT A RETURN ON LINE PREVIOUSLY

The 10-digit Unique Taxpayer Reference (UTR) you last used to send a tax return is still valid.

LOST UNIQUE TAXPAYER REFERENCE (UTR)

If you can locate previous tax returns or documents send by HMRC they will contain your UTR. You UTR can also be found in your Personal Tax Account if you are registered for Self-Assessment.

If you are still unable to locate your UTR then call the Self-Assessment helpline 0300 200 3310 currently due to Coronavirus opening hours are Monday to Friday: 8.00am to 4.00pm.