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If you decide to become self employed, you will be required to register with HM Revenue & Customs before completing your first self assessment tax return. You may also need to complete a tax return for other reasons, like having income from any property, which still requires you to register with HMRC.

Registering with HMRC will ensure that the correct records are set up, ensuring you pay the correct amount of tax andHMRC Advice National Insurance at the right time. If you already complete a self assessment tax return for another reason, and then later become self employed, you should still register with HMRC who will make sure your records are correct.

As soon as you know that you are self employed it is preferable to inform HMRC, as not informing HMRC in a timely manner may result in a penalty charge. You must register with HMRC no later than the 5th October following the tax year for when you need to complete a tax return. For instance, if you are self employed during 2011-12, you must inform HMRC by 5th October 2012.

It is possible to register online when you become self employed, which is the easiest and fastest method. HMRC will then create a self assessment record with a Unique Taxpayer Reference number, which is a reference number made up of ten digits. The UTR will be sent to you by HMRC and should be kept in a safe place as it is required when registering for the online services of HMRC or contacting them.

About The Author

Gary Fields

Content Writer working alongside our expert accountants to bring you the latest Tax and Accounting news.

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