​If you’ve started freelancing, selling handmade goods online, or earning through a side hustle, congratulations—you’re officially stepping into self-employment. It’s a powerful move toward flexibility, independence, and building something of your own. But before you get too swept up in your creative or business goals, it’s worth understanding what self-employment means—especially when it comes to your responsibilities.

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Working for Yourself: The Basics

Self-employment means you’re not on a company payroll. You decide when, how, and where you work. You find clients or customers, deliver your service or product, and get paid directly. No boss. No payslips. No built-in pension or sick pay either.

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For many, it starts as a side hustle—a weekend gig, freelance job, or passion project that begins earning real income. But as soon as you earn over £1,000 in a tax year from self-employment, you must register with HMRC.

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From there, you’ll have some tax rules to follow—but don’t panic. Here’s what that looks like in plain English.

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Self-Employment & Tax: What You Need to Know

• Self Assessment: You’ll file a tax return each year reporting your income and expenses. HMRC uses this to calculate how much tax you owe.

• Income Tax: You pay tax on your profits (not total income). So if you earn £10,000 and spend £3,000 on business costs, you’re taxed on £7,000.

• National Insurance Contributions (NICs): Once your profits pass certain thresholds, you’ll owe Class 2 and possibly Class 4 NICs.

• VAT: If your turnover exceeds £90,000 in a 12-month period, you’ll need to register for VAT.

• Payments on Account: If your tax bill is over £1,000, you might have to make advance payments toward the following year’s tax. A surprise if you’re not prepared!

• Making Tax Digital (MTD): Digital record-keeping and software are becoming essential. MTD for Income Tax will soon make quarterly submissions the norm.

 

Ready to Get Started?

Self-employment is a rewarding path—but handling your tax correctly from the start makes all the difference. Whether you’re just testing a side project or building a full-time business, clear guidance can save you time, stress, and money.

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📩 Need help registering with HMRC, understanding what counts as a business expense, or preparing for your first tax return? I offer tailored support for sole traders, construction workers,  freelancers, landlords and small business owners—making it easy to stay compliant while focusing on what you do best.

Reach out today to get started:

Email: info@accounted4tax.co.uk 

WhatsApp +447563811938

Phone/TM: +447563811938