Basic Guides On How To Pay Taxes
Being self-employed is different to being full time employed by a company but some of the fundamentals, especially around finance, are the same. There are about 5 million freelancers in the UK, and if you are part of the community then you need to know how to file your taxes and register for self-assessment. Yes, being a freelancer can be rewarding and give you control over your life, it can also be stressful, especially if you don’t know how to handle money, taxes and organise the financial side of your business. It is important to know the financial side of the gig economy too. In this article, we will give you a few insights on how to handle your taxes in the UK.
- Know what kind of taxes you have to pay
If you are new to the community, you might be concerned about submitting your taxes. As a freelancer, you are entitled to file your tax under the term ‘sole trader.’ You can also be an employer and an employee at the same time, or you can also be identified as a member of a business partnership.
The bottomline is you need to classify your identity first. Your identity will define your tax code, and your calculations will be based on that. You can visit this page to know your working status.
- Make use of technology- UK Make Tax Digital
The UK government launched Make Tax Digital, a new scheme where VAT-registered businesses are required to record tax digitally for those with a taxable turnover above the VAT threshold.
- Fill out HMRC’s self-assessment form
The first thing that HMRC needs to know is that you are self-employed. That is why you need to register your HMRC self-assessment form. In addition to that, self-assessment is not a tax, it is a way of paying tax. Since it will be your duty and responsibility to tell the HMRC if you think that you need to complete a tax return, and to be honest with the information that goes into the form. If you need help filling out your Self-Assessment form, there is a lot of help available from other Giggers in the Gig Economy.
