Tax self assessment- totally lost

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I did some freelance work whilst on mat leave during the tax year 2022/2023. I thought I’d do the tax self assessment some point in January before the deadline, thought I’d just have to get a login, give my NI number, put down some reference for the work I did, the amount and I’d be told how much I had to pay in tax, and that’d be it.

WRONG!
So I tried to register with government gateway and it seems to have registered me with a business account (is that what I am, in this context??) and it will take some time to send me a reference number - basically it will not get done by 31st Jan.

have no idea what’s going on, in how much shit am I??? Should I have registered as a company? A sole trader? What is a sole trader?? HELP

I used to do freelance photography and graphic & web-design. I registered as a sole trader rather than a company.

Can you call up HMRC for help?

Phone them: they are REALLY helpful :-)

Yes you need to register for self assessment and obtain a unique tax reference before you can submit a return. And freelance work is a sole trade business.

So you'll have to pay the £100 late filing penalty I expect.

You AREN'T a limited company! You should have registered as a sole trader which is the default for individuals running a business or working freelance. If you wrongly registered as a Limited Company, you need, for now, to forget it and register properly as a sole trader individual. At some point you need to close down the limited company, but that's not urgent.

A company is a separate legal entity, so unless you incorporated one then that's irrelevant. One hopes you would know if you had a company because you'd have a whole other set of legal obligations.

I’m a tax accountant. You want to register for self assessment as an individual (sole trader) and get a UTR issued. You won’t be able to submit the return without one so you may be liable to fines and interest on tax due as it’s unlikely to be sent to you before the deadline. Hmrc may waive the penalties and interest if you phone them and plead ignorance but are within their rights to issue them.

Yeah, phone them. They are really helpful.

It sounds like you haven't previously told them you were self employed so they haven't issued you with a UTR (unique taxpayer reference) yet. If you've ever been self employed previously, this number stays with you all your life, like your NI, so if you've ever had one, it'll be the same. They now need to send this out to you.

You need an impressive collection of registration numbers and codes to access your self assessment:
National insurance number
UTR
Government Gateway ID (ten digit number you get when you set up your online login) and password
Then they might decide to post you access codes to get you logged in, which can also take a couple of days.
That's before you need to put in your turnover and expenses!

If you set up a Company it's pretty different - you would have registered it at companies house and received letters from them. You would have been sending your invoices from Change User Photo Company Ltd not Change User, and hopefully set up a bank account for the company to be paid into. It's more complex and you would be likely to need an accountant or at least a bookkeeper to give you a hand. It doesn't sound like that's what you did.

HMRC normally uses 'business' to mean sole trader and 'corporation' to mean limited company.

Good luck!

A sole trader is a person working for themselves. They can employ other people in their business rent or buy premises, do what they need to do, but acting as an individual. Broadly, the other choices are partnerships (when you have two or more of you in business together) and company, which would be registered at companies house.

The sooner you talk to them the easier it will be do deal with the whole thing x

Did you freelance when on paid mat leave from another job? I guess it depends on your contract but I thought that was generally prohibited by employers

Thanks everyone, you’re so helpful!!

definitely a sole trader in this case! Didn’t know the specifics about what a company “is”.

Have not notified them I was freelancing as I didn’t know I had to (realise now that when I asked a friend for advice on the process, I may have asked the wrong questions so got the wrong answers!), will do this asap tomorrow am.

I’ve got the government gateway ID done and now understand why it’s a business account.

wasn’t that much work/money (less than £3K) so hopefully interest on tax due won’t be much and if I have to pay a fine, it is what it is, should’ve dealt with it sooner!!

Wasn’t aware of that either!!!!

When I registered last year in January, the letter with my unique number said I had until mid-Feb to submit the self-assessment so they gave me a longer deadline because I got the number late. I didn't have to pay a penalty for late return. Fingers clcrossed OP!

Thanks!! 🤞🏼 @Coffeeonadrip

It's not a very user friendly system. I was the same and had no experience of being self employed until I had a short career break and did some freelance work that spanned over 2 tax years. Luckily the company I did the work for had an accountant who got me set up with the UTR number from the start. That's the key to it all. The rest of it is fiddly and time consuming but for a small amount income like yours and mine it's not worth paying an accountant, as the tax/NI is negligible. And do remember you can offset any costs of being self-employed against tax. So long as you have receipts, eg a laptop. And if it was wfh with no option to go in I think also a small amount of energy costs. But the mat leave may complicate matters - that I don't know about. I also thought you couldn't work while on SMP just like SSP but could be wrong. My employers certainly would prohibit it.

If you're self employed, you need to register using this form rather than the normal SA1 form

https://public-online.hmrc.gov.uk/lc/content/xfaforms/profiles/forms.html?contentRoot=repository:///Applications/NICs_iForms/1.0&template=CWF1_en_1.0.xdp

If you log into your government gateway account you can usually see your UTR number within a couple of days.
if you expect to go over your personal allowance it may be beneficial to seek a professionals help to ensure you claim all your allowable expenses. There are online companies that help you submit your own self assessment and give you guidance such as Finmo.
If you have no expenses you can claim £1000 trading allowance.
Regarding your maternity leave you need to be careful that you’re still entitled to the maternity pay you’ve received as there are guidelines around how many days someone can work and still receive statutory maternity pay.
I’m sure you’ll be fine. If you’re thinking of continuing freelance work on the side I would think about engaging with a professional to keep everything straight.

finally just to check - the work you need to declare was paid for between April 2022 - April 2023? If it was after 5th April 2023 your self assessment is not due yet.