This is the era of entrepreneurship, and many are choosing this lucrative path! If you have begun to work for yourself, whether earning additional or starting a business, registering as self-employed is essential. But before that, knowing all the nitty-gritty of self-employment registration is mandatory.
So, if you are in the United Kingdom, how will you register as self-employed? It depends on the trading model you select. You can be in partnership or a sole trader to a limited enterprise which sometimes determines your registration process. Here you will know about the fundamentals of the registration process that will help you get your job done with more conviction.
Who Requires Register As Self-Employed In The UK?
This can vary as per the specific needs and requirements of people. Some do not want to miss registration deadlines and keep HMRC penalties at bay; some want to lock in the tax savings, while others wish for higher turnovers. If you want to register for self assessment as self-employed, the following shall guide you.
1. Go to the HMRC Website
Head over to the HMRC website and choose the option to “Register Online”. Provide your full name along with an email address and create a password. A user ID will come to the email address you provided. After that, you can continue with the following steps and create an account online.
2. Sign In To the Government Gateway Account You Created
Now you will need to log in and choose the option ‘Add a tax.’ Using the credentials can log in to the government gateway account and register for self-assessment and self-employed tax. You shall see a choice for adding taxes to your account.
3. Choose the Self-Assessment Option
Select the Self-Assessment option as you see a question asking about the type of text you want to add. This is available for partnerships, self-employed, and trusts. You need to choose the type in the first place and add any other kinds of taxes if you want later. Then proceed by selecting a category from the self-assessment. The options include partnership, sole trader, individual trader, or trust.
4. When Can You Registered As Self-Employed
So, just considering the registration deadline is on your business second taxation year is 5th October, and you begin working independently on 1st March 2020, you have to register by 5th October 2020. Have you missed the deadline? Then settle for some penalties.
5. Information You Need To Have Ready
As per sources, registering with the HMRC shall get faster and easier if you have all the documents and information ready in your hand. Here is the list of things you are going to need to apply successfully at one go!
- United Kingdom Address
- Date of Birth
- National Insurance Number
- Email address
- Phone number
- Business starting date
- Short description of what you do
- Create a ‘Government Gateway account’.
6. Sign Up For the Self-Assessment
The self-assessment is an integral part of the application process, where you will share specific personal information. The information shall be regarding the type of work you shall pursue as you settle as self-employed. Along with that, you will also need to make a declaration that all the things you have filled in the form are entirely accurate.
7. Double-Check All That Details
You need to understand that these types of forms are not like just any other form. They are pretty complex and lengthy. So, you need to be additionally careful when you are entering the details. You will need to make sure that you or anyone reliable checks all the details you have filled in. If any mistakes are there in the information, it can bring about unnecessary troubles from the authority, which you surely do not want.
8. Wait For the HMRC to Review the Application
The HMRC will review the application as you finish submitting it and will send out a UTR number in the next ten days through the post. UTR number is a ten-digit and ten ID number. Make sure that you keep it safe. You might need it if you require proving that you are into solo trading and need to connect with the KMRC and manage the self-employed taxation.
9. Use the Activation Code
You will get an activation code for the government gateway account according to the process of verification. It can take about twenty-eight days for them to send it over to you. One of the crucial things is to key it in as soon as you get it. It has a particular time for expiration. If you lose out on the time of expiry, you will need to request it again.
10. Applying For It, If You Are Registered Already
If you already fill in a tax return for another reason, for example, because you are a landlord or have dividend income, then you should not apply for self-employment again. If you register again, HMRC will set you up on their system for a second time and expect two tax returns from you! Instead, you should complete a CWF1 Form online.
If you have filed for a tax return for any other reason, for instance, if you have a dividend earning opportunity or are a landlord, you must not apply for self-employment once again. If you register for the second time, the HMRC shall set your name on the systems again and expect double taxation from your side. This shall bring about unwanted hassles on your part. So just finish one of the CWF1 forms. You can find it online.
The Bottom Line
Mentioned above were some of the most critical aspects of registering as self-employed In the UK. You need to be aware of certain things before you get into the process. The HMRC registration has a specific deadline, and you need to follow that. Also, you can choose between the online and telephonic methods of registering. The online procedure is more popular now and comparatively a little quicker. However, you can select any option you prefer.