Firstly, you need to register with the tax office. This doesn’t need to be done in person; this can be done online.
Registration on the HMRC website does take a little time, but ultimately is just a series of form filling pages. Once complete, you are then issued with a password and a UTR (Unique Tax Reference) number. You will have to activate the online account, but then, you are set for trading. This can be done up to three months from when you do start trading, but it’s recommended completing the process as soon as you can.
If you are going to be earning low revenues, then you can also opt in to paying for National Insurance, making voluntary contributions; this safeguards your state pension.
If you estimate that you’ll earn over £83,000 per annum, then VAT Registration is also required – more form filling!
This is vitally important: You must keep records diligently!
It is very tempting to leave the paperwork, but it’ll be a bigger headache come the end of the tax year – don’t inflict that on your accountant! It’s best to keep on top of it, just in case the tax man ever wants to poke around in your accounts, then there’s no panic trying to pull everything together.
Keep up to date and file receipts and invoices, even if it is petty cash for a new pen it needs to be logged. It’s better done electronically than in old fashioned paper ledgers. It means that you nd your accountant can access the data, archived or new, without anyone having to be in a particular place at a particular time.
Electronic Tax Returns need to be filed by 31 January each year and when the data is inputted the tax office will generate the amount that you owe them. This appears on screen and can be paid in a variety of ways; online card payments are the quickest and easiest.
By going online, you will know the details of the values and dates of future and historic payments, which makes life simpler for both you and your accountant.
If you have any questions, or require some help, please do not hesitate to contact Brian Munjanja at Broadwing Accountancy on 01604 328328, or email [email protected]
