This section is for you if you are self-employed and on a low income. Self-employed people are those who ‘work for themselves’.
If you are self-employed, you will have to deal with HM Revenue & Customs (HMRC), as they assess and collect tax and pay out tax credits and other benefits.
HMRC do not always get things right. So it is important for you to check the tax you pay on your self-employment income. You may also need to contact HMRC if you do not understand something or if you disagree with them.
In this section, we provide information which we hope will enable you to understand the tax and National Insurance contributions arising from your self-employment. It is easier and cheaper in the long run if you can understand and deal with your own tax affairs.
It is sometimes difficult to know whether you are employed or self-employed but it is important you understand which category you fall into so you can get your tax right. So the first section of this part of the website will help you establish whether you are employed, self-employed, both or neither. Assuming you are self-employed then the rest of the section will tell you what you need to know about dealing with tax when you work for yourself. In particular, we provide information on the following areas of taxation for the self-employed.
- Am I employed, self-employed, both or neither?
- How do I register for tax and National Insurance?
- What dates are important for self-employment?
- What is the trading allowance?
- Working out profits, losses and capital allowances
- Can I claim for pre-trade expenses?
- How do I work out my taxable profit?
- What business expenses are allowable?
- What capital allowances can I claim?
- What if I make a loss?
- What is the cash basis?
- How do I work out my profits for universal credit?
- What tax allowances am I entitled to?
- How do I pay tax on self-employed income?
- What National Insurance do I pay if I am self-employed?
- Enquiries, penalties and debt
- Enquiries in more detail
- What penalties might I be given?
- Alternative dispute resolution
- What business records should I keep?
- How do I repay my student loan if I am self-employed?
- Pension and self-employment
- Do I have to pay VAT if I am self-employed?
- What is Making Tax Digital for VAT?
For information on the scope of the help that you can expect to find in this section, please see the About Us section.
Our guide to self-employment is intended to supplement the material in this section. It explains the less common tax rules and contains more detailed information including a case study showing how to prepare accounts and what to include on your tax return. We wrote this guide to help advisers (non-tax) who advise low-income self-employed individuals and also for self-employed people who want more detailed information in one accessible place.
If you are employed, we suggest you visit our employment section.
If you have come from abroad to work in the UK, we suggest you also visit our migrants section.
Our tax credits section contains information on working tax credit (government support to supplement a low income) and child tax credit (to help those with children). Both of these types of tax credit, together with certain other benefits, are gradually being replaced by universal credit.
If you think you might be entitled to state benefits, we provide an overview of the main benefits.
If you do not agree with a decision of HMRC, find out what action you can take on our tax appeals page.
If you are unhappy with the way in which you have been treated by HMRC, you may be able to make a complaint.
You can find out where to get help from third party organisations in our getting help section.