Do I have to register with HMRC

Do I have to register with HMRC

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Hi guys,

Back in the summer, I left my full-time job working as a management accountant within the retail sector in order to pursue and complete my CIMA qualifications.

As I left my existing employer on good terms, I have been contracting for a couple of days each month helping them with end of month accounts / reports.

Now as Christmas is approaching, the company are going to be very busy for the next 6-9 weeks and they have asked me if I would be interested to contract for that length of time from now till February.

Since I’ve been working as self-employed and being paid on a weekly basis by providing them with an invoice of my professional fees, I haven’t notified the HMRC of my current situation.

My question is as follows:

·         Do I have to notify HMRC that I am working as self-employed?

·         Is it true that that I don’t need to register if my income is below a certain threshold and consequently, I don’t need to pay national insurance, tax etc?

·         On a separate note, working as contractor do I register as sole trader or private limited company. I’m being a paid a daily rate and isn’t really that much.

As you can tell, I’m very inexperienced and any help or thoughts would be much appreciated. There’s just so much information to read online that I easily get confused so I thought this would be a good point of reference.

Many thanks

Replies (11)

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By johngroganjga
05th Dec 2014 13:12

Yes if you are a sole trader you need to register.  How else are HMRC going to know that you don't owe them lots of tax?

There is a small earnings exemption from Class 2 NI, which you may be eligible for.

I am not sure why you are not clear whether you are operating as a sole trader or through a limited company.  Why is it not obvious?  Do you have a company or not?

Thanks (1)
Replying to Lone_Wolf:
By hsalim
07th Dec 2014 09:07

sole-trader / private limited

Hi and thank you for your response.

 

I haven't decided yet whether to become a sole-trader or register as a private limited company. I know the difference between the two but I'm not quite sure how beneficial it will be for my personal circumstances.

 

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David Winch
By David Winch
05th Dec 2014 13:46

Registering with CIMA

Are you registered with CIMA as a Member in Practice?  If not then do check the CIMA requirements.

If you are not going to register with CIMA as a MIP then you need to consider whether you need to register with HMRC as an Accountancy Service Provider under MLR 2007.

David

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By NHGlos
05th Dec 2014 15:07

Status

Quote:
...registered with CIMA as a Member in Practice?

You mention completing CIMA, are you now qualified or a student still? If you are a member you'll need to obtain MIP status. If you are a student or passed finalist you wont need/be able to get MIP status, but you can continue in a self employed capacity as long as you don't not refer to/rely on/promote any association with CIMA.

As David mentions, you will need to consider MLR registration. CIMA membership will cover this, but CIMA can't cover you if you are a student/passed finalist.

You should of course check all of this with CIMA and be sure of your self employed status, particularly as you on client appears to be your ex-employer.

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By Gem7321
05th Dec 2014 15:16

You will also need PII (assuming you don't have it already).

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By LuKosro
06th Dec 2014 15:12

Are you confident that the nature of the relationship between you and your former employer does not amount in fact to a contract of employment? 

http://www.hmrc.gov.uk/manuals/esmmanual/index.htm

PS: Register as a sole trader if you believe that you are working as self employed. Declare the first date when you started work as self employed. Check your NI Class 2 liability. File your tax return online by 31 Jan 2015 if you had any income or any other items to declare on the self assessment form before 5 Apr 2014. 

Check your responsibilities in regards to anti MLR, the Data Protection Act, PII and CIMA membership. Keep an eye on the employment status issue. Don`t go on the limited company route unless you get some professional advice.

Take care! 

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Replying to Wilson Philips:
By hsalim
07th Dec 2014 23:56

Thank you for constructive advice LuKosro

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By ArsalanShah
06th Dec 2014 19:46

High recommended

to register yourself as Sole Trader (unless you are trading as limited company) within 90 days from the date you commenced providing professional services You would also need to register with HMRC as an accountancy service provider for MLR purposes (as already advised by David),if you dont than you are in clear breach and should expect £100 penalty for late registration.

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Replying to raybackler:
By Paul D Utherone
08th Dec 2014 08:47

The £100 late NIC penalty

ArsalanShah wrote:

to register yourself as Sole Trader (unless you are trading as limited company) within 90 days from the date you commenced providing professional services You would also need to register with HMRC as an accountancy service provider for MLR purposes (as already advised by David),if you dont than you are in clear breach and should expect £100 penalty for late registration.

went a while back with the introduction of new penalty rules, but otherwise yes you should register with HMRC and follow all the other advice re PII, professional registration rules, MLR & employment status matters
Thanks (1)
David Winch
By David Winch
08th Dec 2014 17:48

The £100 penalty

I think the £100 penalty referred to by a previous poster was for late registration with HMRC as an Accountancy Service Provider under MLR 2007 (not a penalty for late registration as a self employed taxpayer).

David

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Replying to Wilson Philips:
By Paul D Utherone
08th Dec 2014 18:06

Yes

davidwinch wrote:

I think the £100 penalty referred to by a previous poster was for late registration with HMRC as an Accountancy Service Provider under MLR 2007 (not a penalty for late registration as a self employed taxpayer).

David

I think you're probably right. As you were
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