HM Revenue & Customs. YouTube - HMRC.gov.uk. Self Employed. What Records Do I Keep As A Self-Employed Person? Record keeping (self-employed) You must keep accurate records for your business. For example, your accounts, records of tax you have paid and all other records of your income and outgoings. You'll need these to help you fill in your Self Assessment tax return or to answer any questions from HM Revenue & Customs (HMRC). Small self-employed businesses may be able to use 'cash basis' accounting, based on the money going in and out of your business, rather than traditional accounting methods that cover stock on hand, amounts owed and so on. Find out more about the cash basis on GOV.UK (Opens new window) You can claim flat rate expenses for vehicles, use of home for business and use of business premises as a home.
Read about simplified expenses on GOV.UK (Opens new window) On this page: Business records you may need Keeping up-to-date and accurate records from the start is important for your business. Records you must keep Your business records must include: Records you may need How to keep your records Keep detailed records. Top. Keeping records. If you have to send HM Revenue & Customs (HMRC) tax returns you'll need to keep records to help you complete them correctly. HMRC may ask to see your records if they do a check on a return you send in for any tax.
On this page: Why you need to keep records If you have to send HMRC a tax return, the law says that you must keep all the records and documents you need to complete the return. If you don't have adequate records or if you don't keep them for long enough, you may have to pay penalties. Record keeping penalties If you do not keep adequate records or you do not keep your records for the required period of time, you may have to pay a penalty.
Penalties for an inaccurate return Keeping your records up to date will help you have all the information you need to fill in your return correctly. You won't have to pay a penalty if you can show that you took reasonable care to get your return right but still made a mistake. Top How to keep your records The records you need to keep. CT61 Returns. From UK Banking Requirements CT61 Returns Deposit takers must make quarterly returns of interest paid and BRT deducted on form CT61 to HMRC Accounts Office. These are known as CT61 returns. They must also remit BRT deducted from interest to HMRC Accounts Office. See Deposit takers should note that they must: be able to account for the interest paid and BRT deducted in each quarter (for inclusion in CT61) allow for different return periods for banks and building societies All deposit-takers except building societies must account for BRT deducted: for each complete quarter ending 31 March, 30 June, 30 September and 31 December which is within the accounting period, and for each part of the accounting period which is not a complete quarter.
For example, if a deposit-taker makes its accounts up to 30 April, it must account for BRT in the following periods Building societies must account for BRT deducted: UK Tax Rates 2009. Income Tax enquiries for individuals, pensioners and employees. National Minimum Wage rates. NI - The Basics. You pay National Insurance contributions to build up your entitlement to certain state benefits, including the State Pension. The contributions you pay depend on how much you earn and whether you're employed or self-employed. You stop paying National Insurance contributions when you reach State Pension age. On this page: Who pays National Insurance? You pay National Insurance contributions if you're an employee or self-employed and you're aged 16 and over, as long as your earnings are more than a certain level. State Pension age is 65 for men born before 6 December 1953 and 60 for women born before 6 April 1950.
Some people also pay voluntary National Insurance contributions. Aren't working and are not claiming state benefits haven't paid enough National Insurance contributions in a year to count for the State Pension or other long term state benefits live abroad and want to maintain your state benefits entitlement Find out about to changes to the State Pension age (Opens new window) Top. NI Rates & Allowances.
Income Tax allowances. On this page: Top The Personal Allowance reduces where the income is above £100,000 - by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age or date of birth. These allowances reduce where the income is above the income limit by £1 for every £2 of income above the limit. This applies until the level of the personal allowance for those aged under 65, or from 2013-14, for those born after 5 April 1948, is reached. For married couples allowance this applies until it reaches the minimum amount Tax relief for the Married Couple's Allowance is given at the rate of 10 per cent.
Income Tax rates, allowances and tax bands for 2008-09 to 2010-11 (Opens new window) Income Tax rates and taxable bands * The 10 per cent starting rate applies to savings income only. More useful links Find out more about Personal Allowance Find out more about Income Tax Introduction to tax allowances and reliefs Taxable and non-taxable income at a glance. Income tax. What is income tax Income tax is a tax on income including: earnings from employment, including benefits in kind such as a company carearnings from self-employmentmost pensions income, including state, occupational and personal pensionssome social security benefitsinterest on most savingsincome from shares (dividends)rental incomeincome from a trust. Not all types of income are taxable. For more information about which kinds of income are taxable, see Taxable and non-taxable income. You won't usually have to pay tax on all your income, even if it is all taxable, because you will be entitled to a certain amount of income tax free in each tax year.
There is no minimum age at which you become liable to pay income tax. Back to contents How income tax is calculated To calculate roughly how much income tax is payable for a particular tax year, use the following steps. Step 2 Check whether you can claim tax relief for any money you have spent out over the year. 20% X £11,000 is £2,200. Tax reliefs. Taxable and non-taxable income. Non-taxable income It is important to know what income is non-taxable and can be ignored for tax purposes. You only pay tax on your taxable income so you do not want to include any non-taxable income in your calculations.
You do not have to tell HM Revenue and Customs (HMRC) about income which is non-taxable so you leave it off tax returns and any other forms HMRC sends you asking about your taxable income. When you are working out your taxable income you also need to know about tax allowances and tax reliefs. The following types of income are non-taxable. Social security benefits The following benefits are non-taxable, so you can ignore them for tax purposes: Attendance Allowance Bereavement paymentChild Benefit. Interest and income from savings and investments Interest from the following types of savings and investments is non-taxable, so you can ignore it for tax purposes: Other income which is non-taxable Back to contents Taxable income Some social security benefits and pensions Tax reliefs.
Tax reliefs. About this information This document deals with tax reliefs. However, it doesn't cover tax reliefs on work-related expenses or tax reliefs for self-employed people. For more information about the main types of tax reliefs you can claim as an employee, see the HM Revenue and Customs website at: www.hmrc.gov.uk. For more information about tax reliefs for self-employed people, see the HM Revenue and Customs website at: www.hmrc.gov.uk. Back to contents What are tax reliefs As a taxpayer, if you spend money on certain outgoings, the amount you spend can be deducted from your total income and you will therefore pay less tax. Tax relief on pension payments You can get tax relief on pension payments you make into a company (occupational) pension, personal pension or stakeholder pension, as long as HMRC has approved the pension scheme.
When you retire, you may choose to take part of your pension as a tax-free lump sum. Tax relief on rental income from property Tax relief on life insurance Citizens Advice. Tax return deadlines and penalties. There are some key dates each year when you must send in your Self Assessment tax return and make payments. It's important that you're aware of these dates. If you miss them you may have to pay interest and penalties. On this page: Do you need to fill in a tax return?
HM Revenue & Customs (HMRC) will contact you, usually in April or May, if they already know that you need to fill in a tax return. You'll receive a letter which explains when you'll need to send your tax return back. If HMRC hasn't contacted you, but you think you may need to complete a tax return, follow the link below to check. If HMRC asks you to complete a tax return but you think you no longer need to, let HMRC know as soon as you can.
Find out if you need to complete a tax return Telephone or write to HMRC Top Deadlines for sending in your tax return 31 October: paper returns If you send a paper tax return it must reach HMRC by midnight on 31 October. There are very few exceptions. 31 January: online returns Example 31 January. How to fill in your tax return. How to calculate your taxable profits. Corporation Tax: trading and non-trading - Detailed guidance. Overview HM Revenue and Customs (HMRC) may consider your company or organisation to be ‘active’ for Corporation Tax purposes when it is, for example, carrying on business activity, trading or receiving income. In some circumstances, HMRC would not consider your company or organisation active for Corporation Tax purposes. In this case, your company or organisation is ‘dormant’, for example not active or not trading. HMRC may also deem your unincorporated organisation, such as a members’ club, dormant for Corporation Tax purposes if it is active or trading but it’s due to pay Corporation Tax of less than £100 for an accounting period.
What is active for Corporation Tax purposes Generally your company or organisation is considered to be active for Corporation Tax purposes when it is, for example: What is not active for Corporation Tax purposes There are a number of circumstances where HMRC would generally consider your company or organisation not to be active for Corporation Tax purposes. Rates and allowances: travel - mileage and fuel allowances. VAT. VAT payment deadline calculator. VAT Flat Rate Scheme. VAT. VAT registration. You must register for VAT with HM Revenue and Customs (HMRC) if your business turnover is more than £81,000. You can register voluntarily if it’s below this, unless everything you sell is exempt. When you register, you’ll be sent a VAT registration certificate. This confirms: your VAT number when to submit your first VAT Return and payment your ‘effective date of registration’ - this is the date you went over the threshold, or the date you asked to register if it was voluntary Your VAT responsibilities From the effective date of registration you must: charge the right amount of VAT pay any VAT due to HMRC submit VAT Returns keep VAT records and a VAT account You can also reclaim the VAT you’ve paid on certain purchases made before you registered.
While you wait You can’t charge or show VAT on your invoices until you get your VAT number. You should increase your prices to allow for this and tell your customers why. VAT Flat Rate Scheme. VAT for small businesses. Starting a business. On this page you will find links to guidance on what you need to do for tax and National Insurance purposes when you start up a business as a self-employed person, a partnership or a limited company. You will also find links to additional help and support HM Revenue & Customs (HMRC) offer new businesses. On this page: What you need to do when you start a business Follow the links below to guidance on what you need to do for tax and National Insurance purposes when you start a business including return filing and paying deadlines and what records you must keep.
Self-employed tax and National Insurance Tax returns for partners and partnerships Starting up a limited company Getting started with VAT PAYE for employers Construction Industry Scheme Record keeping Importing and exporting goods and services Top Help and support for new businesses HMRC's help and support for businesses When you need to send payments and tax returns A calendar giving you all the dates of key tax deadlines in one place. HMRC Course: syob. HRMC Workshops & Presentations. Business Education & Support Team booking form - London. Starting and running a business is challenging and HM Revenue & Customs (HMRC) recognises that its customers sometimes need help to understand their tax affairs.
This page provides information about the wide range of help and support they offer to help you handle your responsibilities to HMRC easily and effectively. It's worth spending a bit of time at the outset understanding what you need to do, when, and putting the right processes in place - it saves a lot of time and effort later on. On this page: Sign up for business advice emails from HMRC Signing up for this free service means you will receive a series of tax related help and support emails that give you and your business clear guidance at specific times. For example, they could provide guidance about the type of financial records you have to keep, when and how to complete your tax returns and when payments to HMRC are due. Sign up to receive HMRC business advice emails Top Attend an online presentation - try HMRC webinars. Webinars. Simple record keeping applications for mobile devices. Tax help series Keeping records for business - what you need to know.
Expenses & Benefits. Mileage and fuel allowances. Passenger payments - cars and vans 5p per passenger per business mile for carrying fellow employees in a car or van on journeys which are also work journeys for them. Only payments specifically for carrying passengers count and there is no relief if you receive less than 5p or nothing at all. Company Cars The charge is based on the price of the car for tax purposes (normally the list price) and accessories multiplied by an appropriate percentage based on the level of CO2 emissions and the fuel the car uses. There is a ready-reckoner of appropriate percentages for petrol-powered cars and summaries of adjustments to those percentages for years from 2002-03 to 2005-06 and for years from 2006-07 onwards. Company Vans The rules on which the charge is based were changed from 2005-06.
Fuel charges - company cars and vans Vans: the fuel charge began in 2005-06 but only has practical effect from 2007-08. Advisory fuel rates - company cars Company car and car fuel calculator - company cars. Expenses & Allowances. Deductions for fees and subscriptions paid to professional bodies or learned societies. The list shows: professional bodies and learned societies, approved by HM Revenue & Customs (HMRC) for the purposes of Section 344 ITEPA 2003 (formerly S201 ICTA 1988) details of statutory fees or contributions allowable for earlier years 2003-04 onwards are within S343 ITEPA 2003 (for earlier years S201(2) ICTA 1988) The list includes all bodies approved by the Commissioners for HMRC up to 31 March 2014.
The list will be kept up to date periodically. How to find an entry The entries are listed in alphabetical order, with the main part of the title relating to the profession, industry or activity of the body or learned society shown in bold type, for example: Burial and Cremation Administration, Inst. of Chartered Auctioneers' and Estate Agents' Inst. Acoustical, Soc. of America America, Acoustical Soc. of Funeral Directors, British Inst. of British Inst. of Funeral Directors Financial Planning, International Assn. for International Assn. for Financial Planning Notes What is allowable. Director's loans. HM Revenue & Customs: Directors’ loan accounts and Corporation Tax explained. What to investigate and how: Directors' loans: How can I find out if there were loans?
Capitalise Directors Loan Account. How do I calculate my working from home expenses? Running a business from home. BIM47825 - Specific deductions: use of home: examples. Expenses if you're self-employed. BIM75010 - Simplified expenses: use of home for business purposes. Can I claim for my clothing?