HOW DOES SELF EMPLOYMENT TAX WORK IN THE UK? 

Thank you for taking time to explain this simply - it's much appreciated

I can’t even put into words how helpful these videos are. Thank you 🙌🏼

Thanks for the video Dan...easy to digest and well explained

Pretty useful thanks so much! I'm seeing most of your videos cause I'm starting as a sole trader now. You have amazing thumbnails images for each videos haha love it!

Thanks for the simple video! This will be my first year having to pay tax as self employed, I’m barely 18 so it’s quite a lot for me to take in.

Thank you ..been searching for something like this. Very helpful;

Best to the point , most informative video Iv watched on RU-vid about tax

Thank you for the video! I learned a lot

It was a really helpful video Now I can say I have dot how this works and can read through more than before to watch. Thank you Sir. Regards. Alessandro

Really good video thank you 👍👍

Great video explaining it all so simply

Thanks for these videos

Did my dude just say 22,000 pages! Wooooo. Thanks for the great info too boss!

Thank you, very helpful

Wish they'd teach this at schools.

really useful! thank you i have subscribed

It was really interesting. However, I wish you would explain how to calculate it as well.

Thank you so much 🙏🏽

Binging all your content now, thank you for making these. I work in the film industry and have normally been paid as PAYE where tax and NI deductions are done for me by production, but this year I have started doing invoicing jobs (alongside the PAYE work) where I have to sort my own tax - do I need to register as self employed in order to submit a self assessment in this case?

Lovely video. Could you please expand on why a sole trader should think about a limited company once they earn a certain amout. Thank you

Great video, thanks. What can I claim and not claim, for example a new phone or printer?

Hi , due to my turnover being a lot lower this year I have decided to do my own self assessment. With the help of your videos I have found it an easy task . However, the part that confuses me , is when filling out the expense box for wages . It states not to include your own wages . My tax due is calculated for me on my profits , using the cash basis method . So where are my tax/ni contributions calculated on my drawings? which I take each week in order to pay my personal expenses.

Thanks for the helpful video. How would you define profit if you're a self employed driver ? could that be money after expenses such as food, cost of vehicle ? and how would I prove this ?

Thank you so much for the helpful videos. I’ve only just gone self employed in the last month so I’m still trying to wrap my head around everything. I am very confused as to when or what I should be paying tax and NI wise because I’ve gone self employed so late into the year I’m not sure if I will be made to pay tax in this coming January or January 2024. It would be great if the .gov sites would layout what needs to be done and when clearly but as always it’s all one big mess that no one can understand.

very good and clear communication. I would like to speak to one of your team

Great intro video - thanks. Two quick questions. As someone going into consultancy do I have to register with a UTR before I start my contract - or can I do it after? Also, is it best to find a fixed fee accountant, and how much would these cost (for a relatively straightforward salary type consultancy). Thanks Dan!

i like how u explain it but im someone who learns by SEEING , is there any chance of a video with a spreadsheet that explains this ?

Thank you Dan. So just to be absolutely sure I've understood..we need to save approx 25% of our total income into the business before expenses etc Sorry, I was touched with the very-slow-to-learn- stick !

Great video. It really helped me understand the process. I am a tennis coach and I'm employed on a self employed basis. So I'm still a little bit confused on to how to do all of this. I've just moved to the UK from December 30th 2021 and have just received my first salary payment, 26th January 2022. Now, by the sounds of it, I'll have to put 25% away for tax purposes - does this also include the national insurance payment? I need to figure out how to pay this tax every month - or do I just save it all till the self assessment period? How much do you charge to help me with the submission/accountancy part? Thanks

Thank you very much for these videos! They are extremely helpful! I have a question. If I had a job that was part time and earned less than the £12,000 (or whatever the tax allowance is atm) and I had a side hustle that was beginning to bring in more than £1000 (the trading allowance) BUT the income from both the side hustle and part time job were less than the tax allowance, what taxes would I be paying on the side hustle? Do I start paying when my part time income + side hustle in comings passes the tax allowance?

Thanks for the video. I'm a little confused on what's actually taxable. I'm starting a small buisness where I manufacture products and sell them. I initially want to go the sole trader route. Now I understand the principle of deductibles, but if I make a widget for £2 and sell it for £5, am I taxed on the full £5? To me the profit is the difference but I havnt found any information that says the hmrc recognises manufacturing costs as deductable yet the term used is profit???

thanks for such a great explanation! so helpful! was wondering if you could clarify something for me, I'm a student and want to register as self employed as a little side hustle along side my studies, if for example I take £5000 in this tax year would that income be tax free and national insurance free? thanks again :)

Thank you for the video! it is very helpfull :) In my case I am a full time employee and I want to open a solo trade. I have a NIN and paying through my full time job. Do i have to apply for a second NIN and pay extra in the end of the tax year?

I’ve done a lot of extra work in film the last few months but I’ve probably made less than 2K and spent over £500 in travel, accommodation and food on the go. I doubt I’d have to pay anything as I’ve made next to nothing but kinda scared I’m gonna get some letter from HRMC telling me I owe them haha

I wondered if in your first year of a side hustle is better to put as 'any other income which ' incudes 'freelance work' ? what are the advantages and disadvantages of putting it as self employed ?

Thanks for the video. I'm doing something called profit first. I have 2 separate bank accounts one for saving tax as you said 25% and my profit %. How do i record these amounts for my accountant on my spreadsheet. Do I still class that as my drawings and record the amount I have transferred from my business account to my profit and tax accounts as drawings? i hope that makes sense.

Hi, great video, and thanks for answering all these questions! I have one also. For example, if I make 50,000 pounds profit, does the first 12,000 not get taxes, and then the other tax rates are taxed at separate percentages based on each income level? Or is the tax amount taxed on the entire amount depending on how much you make? So I would only be taxed on the 38,000 above the 12,000, or would I be taxed on the entire 50,000? Thanks, and I hope this is not too confusing the way I wrote it.

Thank you everything was explained perfectly, would you be able to advise, if you are making items as a hobby and selling on Etsy is there an amount you can earn before you have to register as a business, I have heard amounts like £850 per year

Hi Dan, great video! Just a quick question, I'm going self employed in the next few days and very confused on the tax situation. When you say save 25% of what you earn, does this mean save 25% of your profit each time you get paid or 25% of profit each month?

Just stumbled on your page and instantly hit subscribe!! I’m current employed PAYE 45/50k per year. I’m wanting to start my own business in the summer 2024 just as a side job. Id be very happy with 10/15k from my own company. Do you have any videos relating to my new situation regarding tax and which best business type to follow?

Thanks for this Dan - can you clarify something really basic for me? If my business makes £20k profit in a tax year, but I don't draw anything from it, are the tax & NI you talk about due to HMRC, or are these only payable if I draw above the allowance thresholds?

Thanks for the video! Quick question; I’ve just become self employed this month, when will I need to complete my first tax return by?

Great video! Will have to rewatch it to take it all in properly 😂. Quick question, since I have another job in retail currently (just started up my sole trading company) I know up to 1000 is tax free, is it also NI free, or do I have to pay that? My primary job earns around the £12000 PA mark. And is that the FIRST £1000 or only if it's LESS THAN £1000?

Hi there, when you start to earn money from RU-vid, start to have sponsored videos and posts, what is the best way to register as self employed? When you can get tax return when you buy equipment such as camera, laptop etc, or need to travel for work etc? How does it work? As an "influencer" ? Thanks

What about are expenditures? Other than van we can claim? What about food?

I take it sole trader doesn't have a PAYE system like company director? I was a director a few years ago and the system was PAYE. I take it now I am starting up a new sole trader venture I pay tax annually? so keep money aside in different account for tax? I went to a tax calculator and my expected turnover is £60,000 meaning I will have to pay around £8250 extra for the next year? if I get you correctly. I would love to have an accountant on board but they are all afraid to touch me being a CFD stock market trader. I thought originally it would be only paying capital gains tax but because it is my only full time job I have to pay income tax as a day trader according to HMRC rules. Thanks for the info in the video, great stuff.

I'm confused as to if I need to register although haven't started jet, and feel that I will earn less than 12,500 a year depending on what I'm doing it seems I wouldn't make that kinda money, do I still need to file it?. Also if I work not as self employed do I still need to register even if I'm working for someone else?. I'm confused about the dates too. Is 31st January when I pay or is it between the 31st Jan to 5th April. I heard something about the 5th October?. Sorry for all these questions

Love the videos great help thank you. I cant wrap my head around this could you help me? I sell motorcycles and I am using the cash basis, say I bought 20k worth of motorcycles and only managed to sell 15k worth in that tax year. What do I then put in the tax return? Am I 5k in losses for that tax year?

My case is slightly different to a normal self employed person. I work full time as an employed worker for Royal Mail, however I do facebook gaming streaming on a night and it means I'm classed as both. Would there be anything I have to do differently?

Few clarification too. If I have a dependant chikd under 18 does that impact of refund? If there is rental property income will that be included in the same tax caculation? But can I claim property maintainance expences , agent fees, rates, etc

Hi Thank you for your video. It's very helpful! I still got a question - I have submitted my 2022-23 self-assessment and been told I have to pay not only the 22-23 tax bill but also the 23-24 tax bill upfront. My question is, I was only self-employed between June 2022 to April 2023, after which I was employed by a company. I won't be self-employed in the near future as well. Can I just pay for the 22-23 tax bill? If I can't, can I ask for a refund next year? Many thanks!!

Hey thanks for the video. I’m thinking to go self employed. Do I need an accountant? How much should I be paying him?

Question. Is this 2 upfront payments included on summary of next tax year calculations? For example : I done my tax return and it shows I had to pay 14k till 31jan but year before I paid this 2 upfront payment for this year- so do I still have to pay 14k or they will deduct previous payments?

Hi , firstly thank you so much for your videos you are super helpful! My partner is starting as a sole trader. But we don't really understand when he needs to register. In the hmrc page says the deadline is tomorrow and send the self-assessment by 31st january but I take it that's for financial year 2021/2022? If starting now, can he register and do the first self assessment with the records 2022/2023 by 31st of January? Many thanks again for your help!

Hi Dan I have 2 questions... 1. Since self employment in the arts always ebbs and flows....say you got paid for royalties or licensing from your art say...50k in one year but that was a one off...will they expect the 40% plus an additional upfront fee even though the next year you will probably make hardly anything (which is possible in artistic fields)? 2. Is each self employed application for overall works or individual "businesses." For example, I'd like to open an Etsy shop...one for print on demand items such as tshirts and a separate one to sell prints of my photography? Will I need to register each one and the expenses separately? Thanks

Hi, i was wondering, if you start being self-employed from January 2021, will you be free from paying tax until April 2021 if you are earning lower than 12, 000 or does it go from January 2021 to January 2022?

Hi Dan my partner looking to go self employed stating August what’s my first step re tax and national insurance? Do I have to notify the tax people ? Thanks

Great video, thanks for that. One question: lets assume that I started as sole trader on 15-Apr-2020, then close the business on 15-Dec-2020 (de-register as sole trader if thats possible). Then pay tax after Apr-2021 e.g. 31-Jan-2022. Would I still need to pay upfront (50% in 31-Jan-2022 and 50% in Jul-2022) eventhough I know I was out of business forever on 15-Dec-2020 ?

Can you tell me whether the turnover is the payment actually received having deducted CIS tax or before tax is deducted?

Hi I’m about to start working as a labourer for a private guy/ company not really a company but I’m working for him. And he said get a UTR number as a self employed labourer, and an accountant. so I applied for one then he said I’ll pay your 20% tax every week so you recieve £400 to your bank account every week. I’m just a bit confused about this if you could help me please thank-you!

Do I need to give .gov the reciptes to all the parts from the year or just the accountant who works it out? Like do I just tell them what I made or have u got to send them in like fuel, plumbing parts exc?

How do you work out profit for a product you sell? Do u include vat in this calculation?

Hi mate , let’s say I want to start selling online this week would you recommend opening a business bank account straight away or using your personal just to see how it goes? This is the only thing I’m a bit stuck on pls let me know

Hello! What if I am from EU and I decided to stay. I am self-employed and trying to get my national insurance as well at the moment, but due to Covid it is impossible. How do I pay for it if I do not have NI? And, stupid question, but worth asking: do I pay tax at all, if I am from outside of the UK, staying in the UK, and at the same moment working for a company abroad?

Very helpful. My job agent suggested me to join as self employed. What is a the advantage with PAYE? Purhaps I can claim more business / work related expences? Do I need to pay any VAT? What form to fill when filling the tax? Is it a online tool? Do you recomend self lodgement ? Thanks heaps

What is the 20% I pay through cis with my UTR number, do I have to pay more tax aswell as this that gets taken out of my wages by the employer? I really can't get my head around this at all.

Hi, I am involved with an investment company and manage on behalf of friends and family their accounts within that company, I am not a broker or a trader merely someone who manages the accounts and of course my own account. The company on our behalf uses a broker division which is regulated properly and we receive returns weekly, I spend a lot of time withdrawing funds and then upgrading accounts within the various accounts and within the company guidelines. As our accounts grow eventually taking profit will need to be assessed for taxation purposes, from my point of view can I become a sole trader and therefore declare the work that I do. Also could you help and explain the tax implications regarding future income from investments, and how an individual could manage their responsibilities. Sorry this seems complicated...it is a little Kind regards John

I'm not a native english speaker, so I need to slow down the video to understand. But nice, thank you

Accounting profit = pay - expenditures 12.5k profit free 13.5k - 50k - 40% tax 50k on ward , 45% tax

So for simplicity sake, lets say myself joe bloggs has a part time job which pays £625 per month and i also have my own small buisness as a sole trader which also earns £625 per month does this mean on my tax return i have to include my part time job income? which would be bang on 12500 per year meaning no tax just national insurance after the £9500 threshold. However in the even i earn 15000 in the year £2500 is taxable. Would i not be paying tax twice? as my part time job already takes away my tax money

Hi Dan, hoping you can help. I am to start working for a company as a sales agent and worried about that tax side of the business. Due to how the business works, i will not receive commission from sales until into the first 10/12 months of trading. All i will receive are my expenses on traveliing, mobile. To cover my home and buisness overheads i will use our joint savings. Do i inform the tax man or not mention the savings ?

Question: if I have a part time job that brings in under 12,500k a year that pays no tax and have a side hustle that brings in around 6-8k, do I pay tax on the side hustle?

Hi Dan, I am self employed for many years and doing my tax returns with no issues. I have recently graduated from a college and would like to open "another" business as a sole trader. How do I register this within HMRC? I would like to open a business bank account and they ask for reg. no.. How do I do the tax return then? Together or each activity separately?

I am a employed right now. I have accumulated 6000£ credit card dept in the last 2 years and I am wondering if payments towards CC are tax deductible. Would it be worth for me to move from employed to self employed and the tax I am paying right now around £300-£400 to go for my CC payments, because right now when I draw the line I am getting almost nothing or even in negative balance every month?

If you are doing this as a second job/side hussle does that change any of it much?

I really need a accountant I have no clue as I’m just starting off and never learned about it and way to confused

So you calculate your expenses, remove your drawings, then the money after (profit) that is what you get taxed on?

How about if you buy more stock?

I was a bit confused about the NI vs. Stamp - NI is 9% after 9.5k, profit but stamp is 3%? Are stamp and NI two different things?

I'm about to start a small business as a sole trader. One of my friends suggested using an umbrella company to take care of all the accounting etc. Do you recommend this or is it not too difficult to do it all by yourself?

If I’m in the under £50,000 bracket, and I’m part time self employed but also in full time work.. is my personal allowance in my self employed work separate to my full time job ?

I have never been self employed, but I have a letter off HMRC demanding £402 pounds! I don’t understand why this is happening...

Hi, I have a quick query. EG, In year 1 my business takes in £20k, outgoings are £5k, my wages £7k, my repayment of setup costs/equiments/training £7k, so my profit is £1k. Do I only pay tax on my profit and not on my drawings? Does that mean I can have profit of eg, £12.5k before I pay tax? Just trying to get my head around this. Thanks

When you were talking about earning 50K you should look at being a limited company are you talking about 50k before tax or after?

This may be a daft question - but to be self employed do you need to be registered as a business? I think this is the case but was wondering if you could be self employed contractor having your invoices paid to your bank account and then you pay your income tax bill.

As a freelance interpreter can I put my clothes, food, car, petrol in expenses? Thanks

Great video. If we buy a car, is depreciation about 1000 pounds per year? And we can deduct this from our self employed taxable income?

I’m so confused with all this I’m very new to it all. I started self employment in December 2020, I’ve been told from three of my friends different things. It’s all back and forth. When do I have to declare something online if I started self employment in December 2020, thank you.

What if i drive a normal car to get to work , can i put it on the rebate ?

How can I get I touch with you for further enquiries

I have a question, when do I have to announce to HMRC how much I have earned , I'm just about to work self employed about to be a year? Do I announce now or later on the PAYE section on the HMRC part, as I know I have to the tax self estimate before Jan 2023, but can i accounce what Ive earned in the first year anytime now till then ? Thank you Ekram Ali

Hello sir I have to inform HRMC that change of self-employed company. I use WORK for self-employed in parcel delivered I have stop 2 months and join to different company..so I have to inform HRMC?

If you start becoming self employed from October will it count for the 5th April 2022 to 6th April 2023

About to be self employed but I don't know if to set an account up before I get the job or should I wait a while to set up an accountant?

If I’m using a ISA to invest then do I need to write a self assessment?

So if a sole trader makes big money, but then spends so much that there's only £1K left in savings, does that mean zero tax?

If I register as a sole trader in Aug 2021 when will I pay my first tax bill? Thanks for the Video 👍

Hi, a company may want to hire me but for me to be self-employed, i have been told they can do my tax and NI at 22% pm or i can do it. I have calculated it as:- 18,240....over the year i will pay £1,134 income tax and £1,040.64 National Insurance. .My monthly income before tax is £1.520. My tax income pay is £1338.78. Are these figures correct? Also is the 22% correct from them?

hey dan, thanks for video, i m doing job right now and my annual salary is 36000 £ and i get 27855 £ in bank with deduction of nation insurance and income tax ....that is ok for me .....but i want to also start freelancing with job. for example,if freelancing income 12000 £ per financial year than how to paid nation insurance and income tax .... i have double income 36000£ form job and 12000£ form freelancing total 48000 £.....please inform me ,thanks

Hi Dan, i'm currently employed an pay tax through PAYE. however I have been offered a job as a freelancer where I would then become self employed starting jan 3rd 2022. Would I pay tax in jan 2023 only based on what I earn from Jan 2022 - April 2022 and then in jan 2024 pay tax based on April 2022 to march 2023 plus half upfront fro april 2023 to march 2024? Is that right?