Whether you are a contractor, freelancer, sole trader or partnership as a self employed professional you are responsible for your own National Insurance, Income Tax and bookkeeping and you must advise HM Revenue and Customs when you become self employed.
To being with, we advise keeping good records and having separate personal and business bank accounts will help you manage your personal and business transactions and affairs more accurately.
As well as Income tax there are two types of National Insurance (NICs) that you need to consider. The first is Class 2 National Insurance contributions, which is a small weekly fixed amount and Class 4 National Insurance contributions an annual payment, both of which are payable if profits exceed the HMRC profit thresholds.
For the most current NIC rates visit the Government website – Self Employed National Insurance Rates here.
We offer a 24 hour line for consulting free of charge in our golden package. Our service is highly confidential as our client list.
If you are a start-up business your tax return must be submitted to HMRC by the 31st January following the end of your first tax year. However, from the second year onwards you will need to file two tax returns each year, the first by 31st January and the second by 31st July.
Tax is due on profit and your profit is generated when you take the allowable expenses away from the income you have generated. It is important to understand that from the second year of trading, if there is tax due for payment you will be required to pay HMRC on account for the following year’s estimated tax in January, which means your tax bill may be 150% of the previous year and a further 50% will be due July.With our archiving capacities and constant education of our staff, monitoring ever changing regulations and global finance requirements we are sure we can be a valuable ally in your expansion.
Even if you decide to do your own bookkeeping our tax return service will help you reduce your tax bill. We will help you file your tax returns on time and avoid having to pay penalty charges, claim the right expenses and comply with HMRC regulations.
Providing the expenses you incur are for the benefit of your business, what is know as ‘wholly and exclusively’ for business, you will be entitled to claim tax relief from HMRC for these expenses. For example, we will help you reduce the amount of Income tax and Class 4 National Insurance by helping you understand the correct expenses to claim.