[James Styles]

Hi guys I have a few questions as I’m new to being self employed.
I’m registered as a sole trader, I registered online, got my letter in the post a while ago which has said I’m registered successfully and has my UTR number etc but one bit on the letter that I’m not sure about is where it says - you can do a tax return online, if you haven’t done a tax return before online register here (hmrc website) then you will receive a activation code? I go to the site which has my gateway log in, once I’m logged in I can’t see anywhere were it says I need to register to do tax return online? I’m already registered online I’m sure as I had to register to be a sole trader?
Thing is I’ve never done a tax return online before and that’s where it says I need to register to get an activation code if you have never done a online tax return before.....
Also is it April each year you do a tax return online?
I just want to make sure I understand it all way before than, any help would be much appreciated.

[Ooooooog]

Have you traded for a year yet? From what I remember it was panic stations January after the year ended. It may well have changed. There are penalties for filing late.

[zesty]

Give HMRC a ring, they’ll talk you through it mate

[Plankton]

If you started april 2019 then your year will run into april 2020 and you need to file by Jan 2021, so you've got plenty of time. Even if you started in april 2018 then you need to file by Jan 2020.

[James Styles]

Have you traded for a year yet? From what I remember it was panic stations January after the year ended. It may well have changed. There are penalties for filing late.

I’ve only been trading/working for a few months mate

[James Styles]

what I’m more trying to ask is how do I register online to do my tax returns in the future online instead of sending forms back.
I registered as a sole trader online & have received a UTR code but do I need some other activation code to do my returns online?
I thought I’d try ask on here but if I can’t find out I’ll give them a call, I just know it will be long waiting time on the call lol

[nathankaye]

Yes, online you need to register to do your tax returns on line.
Your UTR code is your tax reference number which identifies you to the inland revenue, that's all.
To register to use inland revenue services online is a separate registration where you will receive a gateway Pass code and you will then choose a password upon registering with your gateway code. This will register you for online services, one of which is to return your self assessment online, which gives you the extended deadline of Jan 31st to return your tax forms. However you must pay your tax also by Jan 31st, so I would recommend  that you don't leave it this long to return your taxes!

[James Styles]

Yes, online you need to register to do your tax returns on line.
Your UTR code is your tax reference number which identifies you to the inland revenue, that's all.
To register to use inland revenue services online is a separate registration where you will receive a gateway Pass code and you will then choose a password upon registering with your gateway code. This will register you for online services, one of which is to return your self assessment online, which gives you the extended deadline of Jan 31st to return your tax forms. However you must pay your tax also by Jan 31st, so I would recommend  that you don't leave it this long to return your taxes!

Hi nath, when I registered online I was given a gateway code and have a password, I use that to log in on hmrc site.
What’s confusing me is on the letter I got it says if you haven’t done online tax return before (which I haven’t) then I need to register to get a activation code which apparently gets sent in this post once you have registered...
But when I go to the site they’ve listed to register I just log in (using gateway code and password) which I did online in the first place, I then can’t find any link to getting an activation code sent out or registering for online tax

[nathankaye]

That's all you need then James. You have done what it's asking new ones to do, in order to do your tax return on line ie register.
So as long as you can log on and use the option to return a file on line, you needn't worry anymore about it mate. 👍

[James Styles]

Yes, online you need to register to do your tax returns on line.
Your UTR code is your tax reference number which identifies you to the inland revenue, that's all.
To register to use inland revenue services online is a separate registration where you will receive a gateway Pass code and you will then choose a password upon registering with your gateway code. This will register you for online services, one of which is to return your self assessment online, which gives you the extended deadline of Jan 31st to return your tax forms. However you must pay your tax also by Jan 31st, so I would recommend  that you don't leave it this long to return your taxes!

After reading you’re post, to me it sounds like I’m already registered online then.
What’s weird is in the letter it says when you register to do tax returns online you will receive a activation code in the post within seven days, this was months ago I registered online and I don’t have that but when I do log on I am not asked for a activation code anyway 

[James Styles]

That's all you need then James. You have done what it's asking new ones to do, in order to do your tax return on line ie register.
So as long as you can log on and use the option to return a file on line, you needn't worry anymore about it mate. 👍

Yeah mate I do over worry a bit lol I just like to know I got everything set up right to avoid any hassle or costly fines, being self employed is totally new to me

[Denise l]

Usually if you give a phone number it rings straight away to give you the activation code when you are ready to file, every time.

[Dave Willis]

Yes they should send an activation code by text I believe.

Eventually James once you start paying tax, don’t forget you get billed twice a year, all a bit different to being employed. You’ll have to pay by The end of January and then again in July (on account) plus some NI contributions too.

[Crystal-clear]

Yes they should send an activation code by text I believe.

Eventually James once you start paying tax, don’t forget you get billed twice a year, all a bit different to being employed. You’ll have to pay by The end of January and then again in July (on account) plus some NI contributions too.

Yep tho you need to make some sort of reasonable profit to pay payments on account. Also You only start paying tax once your profits are over about £6250 that is class 2 NI only £150ish then 8600 that'll be about 9% to 12500 that's class 4. So basically up to 12500 profit you will pay very little tax.

Income tax will start over 12500 which will be an additional 20% Plus class 4 National Insurance.. after that you have additional rates.

Remember it's all about profit. in the first year it can sometimes be tricky. keep good records.
Also definitely give HMRC a call they will talk you through everything. I actually had to call them yesterday because my self employment ceased in February since incorporating  to a limited company so did my final self assessment related to business income and inquired about advanced payments on account. Just so you know if you ever do go limited one-day day you also need to stay on the self assessment section for your dividend payments etc.

Hope this helps it's good to know where you stand when you first go self-employed

[zesty]

Untill you’re earning over £12,500, you’ll pay next to nothing James.

Just remember when you start earning the big money, you need to pay ‘on account’ which basically means you pay more tax torwards your next years tax bill.

That probably won’t concern you for a while, but it caught me out when it first happened to me. You pay you tax due for the year worked, and then 50% odd EXTRA towards the next years bill. Just a way of the tax man getting a bit more money!

Best thing to do is ring them. I found them very helpful and didn’t have a long waiting time. Then again that was years ago.

[The Jester of Wibbly]

You don't really pay in advance when paying on account.  As long as you are putting away the right amount to cover tax  and ni each month it will be fine.

End of year is in april.  First payment will be the following Jan.  This is 9 months into the new year so you should have stored the right amount to cover that 6 months on account bill.  The second payment is the following July which is 3 months after the next tax year to pay the last on account amount.  You are not paying up front, just on time estimates

[James Styles]

Thanks for all the help everyone, I will give hmrc a call this week

[Shrek]

You don't really pay in advance when paying on account.  As long as you are putting away the right amount to cover tax  and ni each month it will be fine.

End of year is in april.  First payment will be the following Jan.  This is 9 months into the new year so you should have stored the right amount to cover that 6 months on account bill.  The second payment is the following July which is 3 months after the next tax year to pay the last on account amount.  You are not paying up front, just on time estimates

What % do you put away each month?

[The Jester of Wibbly]

You don't really pay in advance when paying on account.  As long as you are putting away the right amount to cover tax  and ni each month it will be fine.

End of year is in april.  First payment will be the following Jan.  This is 9 months into the new year so you should have stored the right amount to cover that 6 months on account bill.  The second payment is the following July which is 3 months after the next tax year to pay the last on account amount.  You are not paying up front, just on time estimates

What % do you put away each month?

I created a P&L spreadsheet with calculations for my tax including turnover and my expenses for the tax year broke down to each month.  All auto calculating for me as I use George for my database.

I enter each year what the new allowances are. Then it calculates one twelth of the allowance for each month calculating my monthly gross and net profit.

I then move the amount suggested on the spreadsheet to a spare bank account pot to collect my taxes ready to be paid when required.  Then whatever is left are my wages for the month.

It was spot one accurate after I did my returns too.

Does the all singing and dancing cost per month cleaner planner not work out your tax bill along with class 2 and 4 ni?

[Shrek]

Do you work out the payments on account too or just yearly tax?

[The Jester of Wibbly]

Do you work out the payments on account too or just yearly tax?

No just per month.    Then when the bill comes around there is enough to pay last year's balance and the on account estimate.

[Shrek]

Aha , that makes sense. Iv not been too good with payments on account but this one iv just received brought a tear to my eye 
So iv started saving 20% gross , see how that works out 

[James Styles]

I spoke to hmrc today (after a 30 min wait) I’ve got it all sorted now