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Penalties for not registering as self employed

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Hi there, I’ve been struggling to figure out how to deal with my situation, and a little scared around the consequences of not registering as self-employed. I’m currently working for one client, and on the rare occasion a second one since mid 2020. 

I’ve been living in the UK since 2019 to study a MA, and am from mainland Europe, with a pre-settled status. This means I am allowed to work in the uk. During Covid I found a job/client for which I can only work as a self-employed. During this period I couldn’t get a national insurance number (because Covid somehow shut down all the application facilities, for a very long period). Even without NI number I was allowed to work, yet It was impossible to apply for self-employment without NI number… So I continued to blindly work without being officially self-employed. It also being impossible to get clear answers from HMRC at the time. 

I still haven’t registered, although I did finally received a NI number a year ago. So by now it has been part laziness and frustration/part fear of repercussions. 

What could the legal consequences are if I finally register…. I don’t expect I’ll owe any taxes based on my earnings. 


Replies (6)

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By David Ex
17th Jan 2022 10:59

You need to appoint an accountant. If you have got historical “issues”, the matter won’t be helped by not addressing them now.

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Replying to David Ex:
By Hugo Fair
18th Jan 2022 11:28

Quite ... and despite OP's title/question, any penalty for not registering as self-employed is unlikely to be the main issue.
1. Which tax-years are in play (2019-20 or just 2020-21 onwards)?
2. Was the work truly self-employed or as a 'deemed employee'?
3. Are any Tax (or NiCs) due but unpaid?
4. Has OP received any communications from HMRC?

A quick chat with an accountant will help sort out these questions (and any others uncovered during that chat) ... and almost certainly result in a quick and low-cost resolution to OP's concerns - as well ensuring he's on the right path from now.

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17th Jan 2022 11:28

Have a look to see if you fit within the list of people who should be registered for self-assessment If your turnover (not profit) was above £1,000 then you will also need to review whether you would have fallen within the exemption for Class 2 NIC, ie profits below the threshold, as even where you had no tax to pay you may have had National Insurance. I would then ring the Revenue helpline, advise them of your situation and explain why you did not register and register over the phone immediately. If you are then hit with late filing penalties on the Tax Returns apply for reasonable excuse giving all the reasons that you did not register initially and keep your fingers crossed that they accept it. I'm not sure it will wash from the point at which you could register with an NI number but if that was during the 2020/21 tax year then if you can try and get your Return submitted before 31 January and at least then that Return isn't late. The Revenue might still levy the penalty for failure to notify within the time limit but at least if you get the Return in you won't get that penalty and a late filing penalty on top.

As noted above you definitely need to sort this now though - ignoring it out of fear of repercussions won't be a reasonable excuse and will only exacerbate the problem. To be quite blunt you'll either get a financial penalty or you won't and not registering is only going to increase the size of the potential penalty the longer you leave it and make it less likely that you can claim reasonable excuse. Bite the bullet, ring the Revenue and get it sorted then if/when you receive the penalties put in an appeal on the basis that you were unable to get an NI number and for that year I'd be hopeful that any penalties would be waived. From the point at which that excuse was no longer relevant you're less likely to qualify under reasonable excuse so get that one dealt with asap and keep your fingers crossed that it is looked on kindly.

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Replying to KTS:
By SteveHa
18th Jan 2022 08:29

I would not be looking at, which is wrong in so many ways on this. I would be looking at the legislation at

Having said that, I can't remember the last time I saw any sanctions for late notification.

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By doubletrouble
17th Jan 2022 12:27

If you only went self-employed during the 2020/2021 tax year then you should have registered with HMRC by October 2021, as far as I am aware failure to do so only amounts to tax geared penalties so if there is no tax to pay for 2020/2021 which is due by the 31st January 2022 then there will be no penalties.
Also if no tax returns have been issued by HMRC then there can be no late filing penalties either.
As others have said, get registered ASAP

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By Catherine Newman
18th Jan 2022 08:25

You are in time to register for a return for 5 April 2021. The return is likely to have a filing date of 3 months after its issue but the tax should be paid by 31 January in an ordinary year (now 1 April).

I would register it today.

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