Accounting for Self-Employed & Partnership
Self-employment is the easiest form of running a business in the UK. The first step you need to do is to register with the HM Revenue & Customs. You will also need to decide on a name for your business.
You can choose any names, although many people choose to trade under their own name. The entire profit of the business is yours, but on the other hand, you are responsible for any losses your business makes.
Self-employment registration is only possible for UK residents, with a personal address in the UK and National Insurance Number. You must complete the registration within 3 months of starting the business.
Your responsibilities once you’ve registered as self-employed
Once you’ve registered, you need to fulfil a series of key legal obligations. The most important of these is that you must keep adequate records like sales and expenses connected with your business. Then, by 31 January every year, you must file your Self-Assessment tax return. Bear in mind that you will need to pay income tax on your profits to HMRC by 31 January and 31 July, although you may be able to stagger these payments with the prior agreement of HMRC. You will have to pay both Class 2 and Class 4 National Insurance Contributions. You will need to apply for a National Insurance Number if you do not have one.
If your annual turnover is above the VAT threshold, £85,000 in the tax year 2018/19, you must register for VAT. However, you can choose to register voluntary if your turnover is below this level and suits your business.
Working in construction industry
Register with HMRC for the Construction Industry Scheme (CIS) if you are working in the construction industry as a subcontractor or contractor.
In a partnership, you and your partner (or partners) personally share responsibility for your business. This includes any losses your business makes or bills for things you buy for your business. Partners share the business’s profits, and each partner pays tax on their share.
Each partner must be also registered as self-employed and has shares of the profit. Owners are responsible for the business with their all possessions.
Services I offer for sole traders and partnership
- Free advice on which type of business is the most appropriate,
- Registration the self-employed and partnership with HM Revenue & Custom,
- VAT registration and returns,
- Payroll support, payslip, P45, P60,
- Registering contractors and subcontractors with the CIS (Construction Industry Scheme) system,
- Contacting HMRC on behalf of the client.