Paying tax as a self-employed carer may seem like a huge burden, especially the first time you do it. Fortunately, Her Majesties Revenue and Customs (HMRC, the government body that collects tax) have put a huge amount of work into making it as easy as possible to pay your taxes correctly, first time, no matter how complex or simple your tax affairs may be.
Step 1 — Register with HMRC
When you begin to earn your own money, the first thing you have to do is register yourself as self-employed. You have to do this even if you are working for an employer as well. For example, you may be working for an agency whilst maintaining your own client base on the side.
Simply click here to begin your registration, have a pen and paper handy to note down information throughout the process, such as passwords and reference numbers. Here is a handy video to cover off any questions you might have:
You can see that there is no information that you dont have to hand already thus far. Now, you must wait for three things:
- Unique Taxpayer Reference (UTR): So that you can complete your tax return
- Activation Code: So that you can log into the Government Gateway to complete your tax return
- Tax Return Letter: A request from HMRC to complete your tax return with all the information you will need. They promise to send this to you within 2 weeks, however it can take a while so be patient.
Once you have received all of that, you can fill in your tax return.
Step 2 — Fill in your tax return
Ok, so now it is time to pay your tax, it is important that you do this on-time and in full. Note that you don’t need to have done this before the 5th October in your second year of trading.
HMRC have made this very easy, simply click here to log in to the government gateway to set-up and fill in your tax return. Here is a handy video that tells you how to do your tax return:
A key difference to note is that you may be working as an employee at an agency the same time as doing your own private work. If that is you, note that 10 minutes and 26 seconds into the above video, you must state that you were an employee as well. This will open up a new section of the form where you will be able to fill in how much you earned via your other employment. This information should automatically be filled in for you, so just check that it is accurate, and change it when filling out the return later. The key thing here is to fill it out as honestly and accurately as you can with the information available to you.
If you still aren’t sure, there is another handy video that covers off some of the complications you may encounter, so is worth a watch if the first one didn’t make any sense to you.
Alternatively get in touch with an accountant to make sure you are doing the right things. In fact, this is something the author would recommend you do, if only for the first time you do it.
I must stress that the information contained within this article is to the best of the author’s knowledge and the author is not an accountant, thus this should not be used as a replacement for the advice of a qualified accountant.