Tax registration with HMRC

If you've recently set up your own business, you'll need to consider registering as self-employed with HMRC. Whilst we've discussed when you might need to file a tax return previously this post now covers registration with HMRC.  

Registering as self-employed with HMRC

When do I need to register with HMRC?

If you're self-employed, registering with HMRC is usually necessary in the following circumstances:

  • Your self-employed income is more than £1,000 in a tax year. A tax year covers the period  6 April to 5 April.
  • When you are within the Construction Industry Scheme.
  • You are a partner in a business.
  • For maintaining a self-employed record
  • In order to claim benefits based on self-employment

Other forms of tax registration with HMRC

Beside the self-employed there are also other circumstances when tax registration with HMRC may be required: 

You can see more details about the criteria for tax registration with HMRC here

What are the time limits for registration?

The deadline for registration for Self Assessment is 5 October following the end of the tax year. So for the 2020/21 tax year (which ended on 5 April 2021), the deadline is 5 October 2021. The obligation to notify HMRC also applies to Capital Gains Tax and other income.

Our advice is to register as soon as possible as you will potentially be charged a penalty if you register late. 

What records do I keep and do I need to use bookkeeping software?

If you're self-employed you must keep records of your business income and expenses. It may also make sense to set up a separate business bank account.

If your business turnover is more than £10,000 per year the use of software for bookkeeping and reporting will be mandatory from April 2023 under Making Tax Digital.

Do company directors need to register for tax with HMRC?

In December 2018 HMRC amended its guidance indicating where all of a director’s income is taxed at source and there is no further tax to pay, they do not have to register for tax with HMRC and file a Self Assessment return. 

For more useful information, check out our Ebooks here.

And if you'd like to know how we can help you with all of this, or with anything else, feel free to give us a call on 01202 048696 or email us at [email protected].

Alternatively, please feel free to complete our Business Questionnaire here.

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Why Friendly

The Friendly Accountants are Alternative Accountants. Unlike traditional accountants, we look forward - not back.

We work with small businesses and contractors/freelancers who want to embrace the world of online software and the benefits this brings.

So if you'd like to find out more, just give a call or drop us an email - no hard sell.

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Who we are

We're a husband and wife team with over 50 years experience of working with small businesses.

So we're in a unique position to understand the challenges that you face every day in your business.

And what's more, we're fully professionally qualified so you can be sure that your affairs are in safe hands.

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