Self-employment – Your responsibilities & the SEISS
Those who are self-employed define themselves as working for themselves, rather than receiving a salary from an employer. According to UK government statistics, the growth of self-employment has been one of the key features of the UK labour market for the past two decades. At the end of 2019,
there were more than 5 million self-employed people in the UK, representing 15.3% of total employment. Greater London has the highest proportion of self-employed people. If you do start working for yourself, you will be classed as a sole trader. This means you’re self-employed and you need to let HM Revenue and Customs (HMRC) know.
If you are self-employed you need to register as a sole trader. You can do this here
https://www.gov.uk/set-up-sole-trader Once you become a self-employed sole trader you are responsible for keeping financial records,
submitting a self-assessment tax return to HMRC and you are responsible for paying income taxes. If your income is over £85k then you also need to register for VAT.
The responsibilities listed below are for self-employed people. These have been noted on the gov.uk website.
You’ll need to:
• Keep records of your business’s sales and expenses
• Send a Self-Assessment tax return every year
• Pay Income Tax on your profits and Class 2 and Class 4 National Insurance – use HMRC’s
calculator to help you budget for this.
Due to the COVID-19 pandemic, many workers have been financially impacted, including those who are self-employed in the UK who may have lost income. This may be due to health reasons, care reasons, or due to losing customers for example. Due to severity of the COVID-19 pandemic, the government issued support for some self-employed people who have been impacted by the coronavirus. This is known as the Self-employment Income Support Scheme (SEISS).
Grant income received via the SEISS is taxable. Unfortunately, some self-employed people are excluded from this scheme. For further details on the government support available to those who are self-employed please go here – https://www.gov.uk/guidance/claim-a-grant-through-thecoronavirus-covid-19-self-employment-income-support-scheme.