1. Newly Self-Employed -The Basics Business Education & Support Team |Mayl 2010|

2. How do I tell you that Ive started?

You can register in three ways.

• By phoning the Helpline for the Newly Self-Employed on08459 154 515.

• By completing a form CWF1.

• Online atwww.hmrc.gov.uk/selfemployed/iwtregister-as-self-employed.htm

• You must Register immediately!

3. What do I have to pay?

• Class 2 National Insurance

• Class 4 National Insurance

• Income Tax

• VAT (in some cases)

4. Class 2 National Insurance

• Class 2 NICs is 2.40 per week

• Paid by Quarterly Bill or Monthly Direct Debit

• Small Earnings Exception is available if annual profits are expected to be less than 5075

5. Class 4 NICs 2010/11

• 8% on taxable profits between 5715 and 43875

• 1% on taxable profits above 43875

For Example: Profit 12,000

Less Lower Limit 5,715

Chargeable Amount 6,285

Tax Due: 6,285 @ 8% = 502.80

6. Income Tax Rates

Personal Allowance 6,475

Basic Rate 20% of taxable income up to 37,400

Higher Rate 40% above 37,401

Additional Rate 50% above 150,001

For Example: Profit 12,000

Less PersonalAllowance6,475

Taxable Income 5,525

Tax Due: 5,525 @ 20% = 1105.00

7. What exactly is a Tax Return?

A Tax Return is a record of your total income from all sources.For Example:

- Main Tax Return

- Self Employment Page

- Employment Page

- Land & Property Page

8. When will I get my Tax Return?

6 April 10 to 5 April 11 Date of Starting

6 April 2011 Tax Return or notice Issued

31 October 2011 Filing Date for Paper Returns

and HMRC Calculation

31 January 2012 Filing Date for Online Returns

9. Record keeping

There are three steps to remember.

• Set up a system.

• Keep your system up to date.

• Retain your records for five years from the relevant statutory filing date.

10. Day to Day Expenditure

Direct cost/Materials

Fuel, MOT etc..

Wages

Trains and Taxis

Premises

Accountants

Interest

Telephone, postage and stationary

11. Registering for VAT

You must register for VAT if

• your turnover of taxable supplies reaches, or is likely to reach the VAT registration threshold, currently 70,000.

• you have taken over an existing business as a going concern which is already registered

• National Advice Service 0845 010 9000

12. |May 2010| 13. Further help and guidance

• HMRC Website:www.hmrc.gov.uk

• Employer CD-ROM

• Helplines and Orderlines

• Workshops 0845 603 2691 orwww.hmrc.gov.uk/bst

• Business Advice Open Days

• Business Link:www.businesslink.gov.uk/taxhelp

• Department for Business, Innovation and Skills:www.bis.gov.uk(previously known as BERR and DTI)