New Start Up Tax Question


Could anyone possibly help me? I am starting up and will begin trading as sole trader from September 2012 which is when i’ll be registered

Im still employed and will leave here on 31st August. I am really confused about tax returns and what will be financial year and how they calculate my tax owed

Do I basically start from scratch in terms of tax in September? When do I do my first return and for what period?

Thanks in advance for your help


Hi Sally

You’ll be doing PAYE from your current employer so HMRC will have that cash from you already. From when you first start the business (NB: not from when you first start earning money, but from when you open your doors for business!) you should register with HMRC as self-employed paying Class II National Insurance contributions. These are about £10/month so not a biggie!

In April 2013 you’ll get a reminder from HMRC to say that you need to submit your tax return for April 2012-April 2013 by 31st January 2014. Your self-assesment tax return will calculate how much tax you owe based on your employed and self-employed earnings and the tax you’ve already paid under the PAYE scheme.

I’m not an accountant - so definitely check this! Most accountants will give you a freebie session to explain what records you need to keep and HMRC also run really helpful workshops too - despite their reputation, they are not the bogeyman and are very keen to make sure you pay the right amount of tax and have an easy ride of it!


Thank you very much. This is really useful. Its all a bit of a minefield and I want to ensure I get it right from day dot ideally.

I think im going to need to find an accountant for at least advice as there seems to be more to think about than I originally thought.

So, just to clarify, you’re saying if I start trading in Sept 2012 I wont self assess, and then pay any tax, until April 2014?

Thank you, I really appreciate your help


You’d need to register straight away though - and obviously you need to be saving the money you’d be due to pay from Day 1, it’s a good idea to go speak to HMRC - their self-employed helpline is really good!