1. I have been made redundant as a higher rate taxpayer employee. On 1st February 2020 I start as a self-employed freelance. Gross income is projected at £3,500 monthly. I estimate my monthly profit at approximately £2,940 (after deductible business expenses). The HMRC online calculator works out at approximately £562 monthly tax and national insurance combined (£6,751 per annum).
2. I am confused about
• the timings when I will need to pay tax and NI Class 2 and 4 on my self-employed income, and
• how this will be calculated, especially because my income will be less than half what it was compared to when I was on PAYE.
Questions:
a. When do I need to submit the self-employed tax return on my freelance income for February and March 2020?
b. When do I pay tax and NI on that freelance income for February and March 2020?
c. How and when will I be expected to make “payments on account” of tax and NI for self-employed income in my first year of trading (February and March 2020)? And the second year of trading (April 2020 to March 2021?)
d. How do I persuade HMRC to limit their requests for payments on account, based on my new projected freelance part-time earnings income at less than half what it was as PAYE salary?
Any pointers gratefully received
Thanks
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