What is the meaning of self-employed?

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If you work for yourself either part time or full time – without being on a salary or commission from an employer – then you’re considered self-employed.

Tax and national insurance contributions are not paid at the time you receive payment, if you’re self-employed and therefore you are legally bound to declare your earnings to HMRC.

You must register with HRMC if you are given any payment for a service or from any business operations. However, this doesn’t necessarily mean you will have earned enough to pay tax on it.

You must register as self-employed within the first quarter of starting to trade otherwise you will be liable to pay a 100 fine.

Online businesses have become massively popular as more people have started running them as part-time ventures. As a result, lots or people are unsure what they need to declare for tax purposes and at when exactly they need to register as self-employed.

For instance when does selling a few items on eBay turn into a business, and therefore a taxable activity? All e-traders must register with HMRC under law so that their income can be taxed if it is high enough.

You are an e-trader if you sell goods purchased with the intention of selling them on again, sell items you have made yourself for a profit, sell or purchase on behalf of other people for a profit, or generate an income from providing a service.

If any of the above applies to you then you are required to register as self-employed with HMRC within the three months or 100 days. When it comes to eBay, it is extremely unwise to delay as the tax man runs checks on online auction sites to try and find members processing large numbers of transactions.

Startups.co.uk is your number-one online resource for starting a business. Whether you are a budding entrepreneur ready to start a business for the first time or you have just started a business, we have all the news and information you need to get your small business off the ground.

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Topics: Taxes | Comments Off

Tags: Business, employed, Online, self, self employed, Selling, small, start, starting, tax, Taxes, When

Article Citation
MLA Style Citation:
Rizk, Sara "What is the meaning of self-employed?." What is the meaning of self-employed?. 20 Dec. 2010. uberarticles.com. 6 Apr 2012 <http://uberarticles.com/finance/taxes/what-is-the-meaning-of-self-employed/>.

APA Style Citation:
Rizk, S (2010, December 20). What is the meaning of self-employed?. Retrieved April 6, 2012, from http://uberarticles.com/finance/taxes/what-is-the-meaning-of-self-employed/

Chicago Style Citation:
Rizk, Sara "What is the meaning of self-employed?" uberarticles.com. http://uberarticles.com/finance/taxes/what-is-the-meaning-of-self-employed/

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