Self-employed on the side

Afternoon MiPs. I'm after a little advice/confirmation on income earned from self-employment 'on the side' so to speak. I work in practice but dealing with year end accounts and limited companies, so my knowledge in this area is purely theoretical and a little sketchy. I currently pay tax and NICs through PAYE as normal.

I'm looking to do some self employed work in the evenings and weekends (not book-keeping/accountancy so no professional issues), very low income at the moment. I know I'll need to register with HMRC online and I'll be able to claim the Class 2 exemption as I'll be under the £5,750 threshold (and therefore no Class 4 will be payable either).

I'm happy with the records I need to keep re income & expenses; beyond registering with HMRC as self employed and starting to do a personal tax return, is there anything else I need to do to set up and keep my tax in order? If I was to start before April would I have to do a tax return for 13/14 or can I wait until next year and declare everything then?

Many thanks for any help.

Comments

  • ClaireS17
    ClaireS17 Registered Posts: 16 Regular contributor ⭐ ? ⭐
    Hi,

    I'm in the exact same situation as you this year. I think you have to file a 13/14 return and then in 14/15 you will have an overlap of however many months you traded before 5th April 14 on the 14/15 return. As you, like myself, won't have much income from your self employment there won't be much, if anything extra to pay on the overlap period.

    Hope that helps somehow

    C
  • Laura8192
    Laura8192 Registered Posts: 95 ? ? ?
    Someone please correct me if I am wrong!

    I am 99% sure you can just declare your accounting period to be 1st Jan 2014 (or whenever you started in business) to 31st March 2014. You would then fill in SA return for that period. Then next year your accounting period would be 1st April 2014 to 31st March 2015, in line with the tax year which makes everything so much easier.

    I say I am 99% certain, this is how I have done the accounts for the clients I had who started during 2012/13 tax year so I really hope I am right!
  • peaman
    peaman Registered Posts: 123 ? ? ?
    Yes Laura you can do as you suggest and have a short period to 31.03.14 (or 05.04.14) to avoid having to worry about overlap relief! I have done this many times.

  • LynWest
    LynWest Registered Posts: 122 ? ? ?
    When i started i did a short period to avoid overlap relief as you can only get this back when you stop trading. I almost always recommend my clients to do a short period then they fall in with the tax year and there is no overlap to worry about. Good luck, hope it goes well
  • CeeJaySix
    CeeJaySix Registered Posts: 645
    All seems straightforward enough, thanks for the replies.
  • Suejw
    Suejw Registered Posts: 39 ? ? ?
    How does that work if you start as self employed on 1st May 2013 ?
  • Jawz
    Jawz Registered Posts: 53 Regular contributor ⭐ ? ⭐
    Sue, as Laura has suggested above, you can declare your accounts to be from 01.05.13 to 31.03.14 (11 months-short period) and then the year after 01.04.14-31.03.15
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