Surprisingly, if you start a business as a self-employed individual then there is no need to inform HMRC and register for tax. However, there is a legal requirement to register for National Insurance, and this is done by completing a form CWF1 and submitting it to the tax office. Not surprisingly, the tax office then use this notification to register the business for both National Insurance and tax.
One small consequence of Making Tax Digital (“MTD”) is that from February 2017 you are unable to obtain a hard-copy of this form to complete manually. Instead, you will need to:
- Go online, complete the interactive form, print it out and then send to the tax office; or
- Complete the online registration process; or
- Come to WatkinsonBlack who will do it all for you.
Our advice would be to most certainly not take the first option. Our experience of sending any forms by post to HMRC is that they are ignored 30-50% of the time. If you do not take this advice then you should ensure that you keep copies of all documents together with proof of posting in order to defend yourself against possible penalty assessments.
For more information about our personal tax services