Totally confused self employed.

[isblokken]

Ok, I'm really lost with all this tax stuff and I don't have a whole week to read through the HMRC website, any advice would be greatly appreciated.

Basically I'm a freelance designer, working from home, since Sept 2010. Roughly earning 10 - 12k

So far I have:

1. Registered self-employed online for NIC / tax in September 2010.
Surely they should send you a letter/email confirming this, but I recieved nothing

2. I recieved a letter about HMRC National Insurance for which I have set up a Direct Debit.

I asked an accountant friend about my tax return and her advice was simply 'don't do anything until they send you a letter.' It's been 14 months since I registered so I assume I'm not going to recieve any post.

So what's my next move?

Do I need a VAT number for my invoices? I phoned the VAT Department who told me that unless I was earning 73k I wouldn't need to bother with registering for VAT.

I just want to get this out the way now, is it worth using an accountant for a one-off fee to sort it out for me, or will they just be using a calculator for 5 minutes and get me to do the rest?

[Incredulum]

Your point '2' goes against your point '1'... you HAVE received something?

You need to submit a tax return for the period to 5 April 2011. To be done online by 31 January 2012.

Ignore VAT completely until you make sales of 73k in a year.

Then add up your income, add up your expenses and you are sorted. Might be worth using an accountant to ensure you have maximised your deductions, but it will save you a fortune if you have done the adding up in advance.

[JRG]

You registered as self-employed online, and then received a letter from HMRC regarding National Insurance, for which you set up a Direct Debit. Surely that letter confirms that your registration was successful.

Being self-employed means that you pay Class 2 and Class 4 National Insurance Contributions (NICs). The Class 2 NICs are based on a fixed weekly amount, which presumably is what your Direct Debit covers. The Class 4 NICs are based on your annual earnings (less allowable expenses, if applicable), and are calculated by HMRC when you complete the required Self Assessment Tax Return (SATR).

If you have no allowable expenses, or if they are very simple, then you can complete the SA form quite easily yourself. Your SATR for the 2010/11 Tax Year must be submitted online by 31st January 2012. If you had any PAYE earnings prior to September 2010 these must be included, along with any income tax paid. HMRC will calculate the income tax and Class 4 NICs due. If you owe money you will usually have to pay the amount by 31st January 2012.

P.S. The onus is on you to ensure that you pay the correct income tax and NICs on time, and not on HMRC to ‘send you a letter’.

[isblokken]

Thanks for the reply

So I don't need a VAT number at all? I'm always finding things that require me to enter my VAT id, like buying stock images, invoicing through freelance websites etc.

Thanks.

[nikkisizer]

Nikki, the idea of the Forum is to provide initial advice and not just to say "I can help, get in touch". [original content removed - Ed]

[mullet]

Is this an open forum, or a place to find new clients? Surely advice should be given in public responses (unless the matter is of a private nature of course).

[accounting-help]

No VAT until you go over the 73k threshold.