Because the job market is so poor, more and more people are becoming self employed. It’s not just a plan B of course and there are numerous advantages to being self-employed: you are your own boss, you can claim certain expenses through the tax system and you can choose your own hours of work.
A caveat with working for yourself is that you’ll need to complete your own tax return. In some ways this is a benefit, and it means you pay your year’s tax in a lump sum as opposed to every month. Of course this does mean that you’ll need to ensure you have the money you owe in tax saved up towards the end of the year, otherwise you’ll face a fine.
Not every self employed person knows this, but you can claim back certain expenses via the tax system. Generally speaking, this is any expense that is involved in the running of your business. So a portion of your rent (if you work at home) may be claimed, as could a car mileage allowance.
Before claiming these expenses, it’s important that you check the HMRC website for the specific details, and ensure that you only claim back the tax you’re eligible to claim.
Self assessment tax can be a daunting proposition, especially if you are newly self-employed. There are legal ramifications if you don’t complete it either on time or with accuracy. Luckily, there are various companies who will help you claim through the tax system and complete your tax return correctly.