Category: Self Employed

Calculating taxable profits using the cash basis

Under the cash basis, small businesses are taxed on the basis of the cash that passes through their books, rather than being asked to spend their time doing calculations designed for big businesses. For 2018/19 onwards the annual turnover limit below which a business can use the cash basis is £150,000. The exit threshold above…


Self-employed invited to get ready to make their claims for coronavirus (COVID-19) support

From today (Monday 4 May), HM Revenue and Customs (HMRC) will begin contacting customers who may be eligible for the government’s Self-Employment Income Support Scheme (SEISS). Check your eligibility here: https://www.tax.service.gov.uk/self-employment-support/enter-unique-taxpayer-reference It’s imperative that you have a government gateway account if you intend on claiming as your tax agent or adviser cannot make the claim for you….


Help for Self Employed

New self-employed income support scheme Bad news for company owners!Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes. Speaking live from Downing Street, the Chancellor says that…


What to do if you need to change your tax return

You made it and filed your self-assessment return for 2018/19 by the 31 January 2020. However, having felt pleased with yourself, you realise to your horror that you have made a mistake and need to correct your return. Can you do this and if so, how and by when? Yes, you can If you have…


Are workers employees?

It is important to know whether a worker is employed or self-employed as there are many differences in the way in which they will be taxed. Broadly, employees are taxed under the PAYE system with income tax and Class 1 national insurance contributions (NICs) being deducted from payments made to them. Class 1 NICs are…


Should an LLP partner be treated as a salaried partner?

As a general rule, the individual partners in a partnership are treated as self-employed for tax purposes. Consequently, they pay tax under the self-assessment system and pay Class 2 and Class 4 National Insurance contributions on their profits. However, in a limited liability partnership (LLP), some of the partners are more like employees in nature…



Calculating the Class 4 NIC liability

The self-employed pay two classes of National Insurance contributions – Class 2 and Class 4. Class 2 contributions are weekly flat rate contributions which provide the mechanism by which the self-employed build up their entitlement to the state pension and certain contributory benefits. By contrast, Class 4 contributions are based on profits from the self-employment…


Timing dividends right could help save tax

Timing the date of a dividend payment from a company can determine both the amount and the due date of the tax payable. This may be a particularly useful strategy in a close- or family-owned company. The dividend allowance, which was originally introduced from 6 April 2016, was cut from £5,000 a year to £2,000…


Read our quick guide on whether you should pay voluntary National Insurance Contributions

Voluntary NICs – should you pay? The payment of National Insurance contributions provides the mechanism by which an individual builds up their entitlement to the state pension and certain contributory benefits. Different classes of contribution provide different benefit entitlements. Employed earners pay Class 1 contributions where their earnings exceed the lower earnings limit – set…