I would like to register as a self employed, working as a web designer/developer. Could someone tell me what all (roughly) the fees and taxes to be paying? Class 2 tax, national insurance, business tax?…
Apart from that, what should I put as a business address (I will be working on the train, at home, on holidays, etc, not in an office)?
Thank you very much!
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23. February 2010 at 10:46 am
Use your home address, and you can claim proportional expenses for the business use of it against your earnings.
You will have to pay Income tax, Class 2 and Class 4 National Insurance Contributions. Class 2 is a flat rate, Class 4 depends on earnings. You will also probably have to register for VAT.
23. February 2010 at 10:46 am
The taxes you pay will depend on your income. Any national contributions will be calculated by the tax office and added to your income tax.Your national Insurance as self employed, does not cover you for any sickness benefits.
You also have to register for VAT payments. You have to have a business bank account, which is completely seperate from any other bank account, and only monies from your business go into this account and business outgoings.
You will need to keep all reciepts for any purchases for your business, and a ecord of any outgoings. You have to inform the Inland revenue that you are self employed and fill in any forms sent to you, you will then be sent a tax reference number.
From a Tax point of view, you are far better off using your a small room in your home for an office, because you can claim for items that you will get tax relief on. You can claim for stationary, telephone rental, office furniture, cleaning, decorating, office machinery etc. Keep two ledgers, and complete them every week. One ledger for income, and one for outgoing expenses.