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Who Needs to Register as Self Employed
Generally speaking anyone who earns UNTAXED income of more than £1,000 during a tax year (6th April to 5th April) needs to register. If you are unsure you can check whether you need to file a tax return here or by calling HMRC on 0300 200 3310.
There is a common misconception that just because people have not made any profit or have earned less than the personal allowance that they do not need to let HMRC know.
This is incorrect.
You must always let HMRC know that you are in business, regardless of what you make. You may have no tax to pay due to your earnings, allowances and reliefs though. But HMRC use self assessment to track your earnings to prove that you have no tax to pay.
If you have earned less than £1,000 you may be eligible to claim for the HMRC Trading Allowance. This means if your earnings before any allowable costs were less than £1,000 you don’t need to register as self employed or fill out a self assessment tax return.
Read More: HMRC £1,000 Trading Allowance
When Should You Register By
The Deadline To Register is by 5th October in your business’s second tax year. There are penalties for missing this deadline, which can be up to 30% of your tax liability.
So if you earned income through self employment during the tax year 2016/2017 (6 April 2016 to 5 April 2017) then you need to apply for self employment by 5th October 2017.
But if you are in business, then I recommend you register straight away to avoid deadlines and a last minute rush.