All about becoming a self-employed freelancer

3 mins

Many people dream about being their own boss and working for themselves, and it can certainly be a great feeling, but it also means that you are responsible for sorting out your own tax affairs with HMRC. For many, this is more the stuff of nightmares than dreams! Fear not though, our experts at DSR Tax Refunds are here to give you the lowdown on how to become a freelancer and stay on the right side of HMRC. Our friendly team are always on hand to help you out too so give us a call on 0330 122 9972.
What are the basics of being a self-employed freelancer?
HMRC consider you to be a sole trader, if you start working for yourself as a freelancer. This means that you will have to register with HMRC as a sole trader and you will need to file a self-assessment tax return to make sure that you are paying the right amount of tax and National Insurance on your earnings.
You will need to register for a UTR (Unique Taxpayer Reference) number with HMRC and you will need to keep good business records to help you in filing your tax return. Make sure you file it before the deadlines or you will end up with a £100 penalty.
Should you become a Limited Company?
Depending on your circumstances, you might find that it is advantageous to you to form a Limited Company. Being a Limited Company can offer you certain protections against financial losses or claims from unhappy customers, but they do involve set up and admin costs.
Will IR35 apply to you?
If you have never heard of IR35, it is a piece of HMRC legislation introduced in 2000, to crack down on people falsely claiming to be self-employed and therefore claiming advantageous tax breaks due to their self-employed status. Other unscrupulous employers were forcing people to become self-employed freelancers, so they could get away without offering them the full protection that the law gives to employees.
To consider whether IR35 applies to you, you need to question your working practices to see if HMRC would consider you to be an employee in disguise. Do you take any financial risks? Can you have more than one client? Do you have the final say on who does the work and how? Do you provide your own equipment? If these are all situations that apply to you, then HMRC will likely view you as self-employed. If, on the other hand, you work set hours, are paid on hourly, weekly or monthly, and work under someone else’s supervision, HMRC may be likely to view you as employed rather than self-employed and you could fall foul of the IR35 regulations.
How can DSR Tax Refunds help?
Because we know just how complicated it can get when you set yourself up as a freelancer, our tax experts at DSR Tax Refunds are at hand to make sure that your self-assessment return goes as smoothly as possible. We ensure that you only pay the tax that you are liable for, not a penny more, and that you are able to claim the full amount of tax relief you are entitled to without falling foul of HMRC’s regulations. We also deal with HMRC on your behalf, freeing up your time to do what you do best – like, run your freelance business! Call our expert team on 0330 122 9972 – we’re the tax experts you can trust.

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Our experts have collected an extensive range of handy informational resources across a number of common taxation areas. If you can’t find what you are looking for here, check out our Resources section.