Congratulations! You have decided to join the growing ranks of Small and Medium Sized Enterprises that are the lifeblood of the UK economy.
According to statistics released by the Department for Business Innovation & Skills (BIS) in October, there were an estimated 4.9 million private sector businesses in the UK at the start of 2013; an increase of 102,000 compared to the start of 2012. 62.9% of the private sector businesses were sole proprietorships, 28.5% were companies and 8.9% were ordinary partnerships.
The BIS statistical report can be viewed here http://abytx.co/InZNCf
You might be a plumber, a taxi driver, a shopkeeper or an online only trader. Regardless of the business you are running, you will need to tell HM Revenue & Customs (HMRC). As far as HMRC is concerned, a business has generally commenced trading once someone has advertised for work, has provided a service to a customer or sold a product to a customer.
Once you have begun trading, you need to notify HMRC within 6 months of the end of the tax year in which you started. Each tax year runs from 6 April to 5 April, so the deadline is 5 October. Failure to tell HMRC within the time limit can result in a £100 fine, plus interest.
Registration can be made online via the HMRC website using this link http://abytx.co/19cmFeA
Further details on what information is required at registration can be viewed on the GOV.UK website using this link http://abytx.co/18T8L4C
If you are unable to register online, a form CWF1 will need to be completed instead. The form can be printed off here http://abytx.co/1dJYNq9
Finally, HMRC has produced a webinar called ‘Self Employment and HMRC – what you need to do’ which is available on YouTube http://abytx.co/1b7aW50
Author: Guy Smith, Senior Tax Consultant on the ReSource Tax and VAT Consultancy Team.
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