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Self-employment

Updated on 1 November 2023

This section is for you if you are self-employed and on a low income. Self-employed people are those who ‘work for themselves’.

Illustration of the words self and employed

You can be self-employed in a number of ways including as a sole trader, in a partnership, through the Construction Industry Scheme (CIS) and working in the gig economy. You may also be employed and self-employed at the same time, for example you could work part-time in the day and run your own unrelated business in the evenings. You may also have more than one self-employment business, these are known as multiple trades.

This section explains how tax and National Insurance works 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 some other benefits if you claim them (like child benefit).

HMRC do not always get things right. 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.

What information and help can I find in this section?

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.

There are a number of things to consider when you first become self-employed and then there are requirements that must be considered on an ongoing basis. This flowchart sets out these various stages and links to where can you find further detailed information about each stage in this section of our website.

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 (this is addressed in the first box shown in the flowchart below). The second page of this section 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 and National Insurance contributions when you work for yourself. In particular, we provide information on the following areas:

For information on the scope of the help that you can expect to find in this section, please see About Us.

Where can I get more help?

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 2022/23 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 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.

HMRC manage the UK tax system. You can contact them with general income tax enquiries or specifically in connection with Self Assessment.

HMRC have e-learning packages available online and run regular webinars which you can join to help you start to understand your tax affairs as a self-employed person.

You can find out where to get help from third party organisations in our getting help section.

Self-employment process by LITRG

Tax guides

Introduction to the tax system How do I work out my tax? What income is taxable? What tax allowances am I entitled to? What tax rates apply to me? How is my tax collected? What if I cannot pay my tax bill? Do I need to complete a tax return? Self Assessment: understanding the basics What is Simple Assessment? How do I claim tax back? How do I claim back tax I have overpaid through PAYE on wages or pensions? How do I claim back tax if I complete a tax return? How do I claim back tax if I am taxed under the Construction Industry Scheme (CIS)? How do I claim back tax on savings income? How do I claim a marriage allowance refund? How do I claim back tax on a payment protection insurance (PPI) pay-out? Should I use a tax refund company? What is National Insurance? How do I get a National Insurance number? What are Specified Adult Childcare credits? What is Scottish income tax? What is devolution? Do I have to pay Scottish income tax? How does Scottish income tax work? What is Welsh income tax? Do I have to pay Welsh income tax? Do I have to join a pension scheme? Tax relief on your pension contributions HMRC digital services Enquiries, penalties, appeals, complaints and debt Enquiries How to survive an enquiry by HMRC Tax penalties Tax appeals Alternative Dispute Resolution How do I complain to HMRC? What if I cannot pay my tax bill? What if I have a tax credits overpayment?
Am I employed, self-employed, both or neither? Working through a limited company What is the national minimum wage? How do I work out my tax? What income is taxable? What tax allowances am I entitled to? What tax rates apply to me? How is my tax collected? How is tax collected on taxable state benefits? How do I check my coding notice? Do I need to complete a tax return? What tax do I pay on redundancy payments?Employment benefits and expenses What are benefits-in-kind? What payments and benefits are non taxable? What if I incur expenses in relation to my job? What travel expenses can I claim? What if I use my own car for business purposes? Payroll giving Allowances and expenses paid to armed forces personnel and deductions from their income Pensions and employees What is automatic enrolment for employees? What National Insurance do I pay as an employee? How do I repay my student loan? What if I do not pay enough tax? What if I pay too much tax? What if I work abroad temporarily? What if I am in the armed forces and work overseas? First time workers Apprenticeships

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