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Just starting out as a freelancer - tax and NI help needed!

(5 Posts)
Twirl Mon 21-Sep-09 18:28:47

Hello
I am hoping someone can advise me. I am just starting out as a freelancer and I wondered what I need to do in the way of notifying anyone about tax and NI. When I last worked (a few years ago) I was employed so didn't need to worry to much about this sort of thing as HR took care of it. Not sure what I have to do. I already get a self-assesment tax return as I rent out a property. Can anyone advise?
Thanks

2to3 Mon 21-Sep-09 20:32:15

You need to call the IR and register as self-employed. They'll set you up with NI contributions and send you a booklet with lots of info. I found their helpline for the newly self employed quite useful when I started out.

You don't have to pay tax on the first £6000 or so (don't know exact figure - please check) you earn. After that I usually put away 1/4 of what I earn for tax, but it depends on how much you make - if you've got a high income you need to set aside more, around 1/3 of your earnings.

I get my husband's accountant to do my tax return every Jan - it costs about £300 and he files it for me. If you're good with numbers you could always do it yourself - I'm a spreadsheet idiot so no chance blush. Good luck!

MaryBS Mon 21-Sep-09 20:35:02

As 2to3 says, plus keep receipts for everything! If you're organised, keep a spreadsheet of them, dates, amounts, what for, and keep the receipts in date order.

Twirl Mon 21-Sep-09 21:53:45

Thanks so much for this!

SarahS27 Sun 04-Oct-09 11:38:22

Hi Twirl

2to3 is correct - you need to advise the HMRC that you are self employed.

You will need to keep hold of any income or expense receipts and also your bank statement if you are going to run the business through it. A separate bank account is preferable but sometimes not justified - depends on the amount of transactions you're going to be dealing with through the business.

The HMRC website is pretty good for general info about self employment but as an accountant I've written a short mini guide which contains a summary of useful info. If you'd like to see it, let me know.

It's well worth getting an accountant on board because they can save you so much time and money (!) by making sure you claim all of the appropriate business expenses and keep your tax as low as possible.

Good luck with your business! smile

Sarah

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