is the simplest business activity in the UK.
You are the boss for yourself, you decide how many hours a day you work, when you take a break or go on holiday.
You work independently and you can perform services for many people.
Your company is not legal entity, so remember that you are responsible for the business with all your assets.
You should also remember about the obligations related to self-employment.
You are required to submit a tax assessment once a year (Self Assessment), you must also remember to pay income tax and national insurance.
What’s important – documents about the company should be kept for 5 years! On the other hand, if your company’s revenue exceeds £ 85,000, you must register and account for VAT. Accordingly, self-employed person would have a tax thresholds. The tax-free amount for 2019/2020 is £ 12,500 and income up to this amount is not taxable,however you will pay 20% tax on antything over £ 12,501
If you decide to run Self Employment, make sure to register with HM Revenue and obtain a UTR number. There is no obligation to register at Companies House.
Also remember to pay National Insurance Class 2, which is £ 3 a week if your earnings exceed £ 6.365 in the tax year 2019 – 2020. Nevertheless, if your earnings are less than £ 6.365 you are not required to pay any national insurance, however you can still choose to make these contributions voluntarily. If you earning are over £ 8,632 , in addition to NI Class 2, you must pay NI Class 4, which is 9% on an income over £ 8,632
If you want to start a business in the UK and enjoy independence, please contact us. We will advise you on how to take your first steps efficiently and help you set up a business. A reliable accountant is more than half of your success.