New to self employment? August is the time when many GP registrars leave the comparative safety of PAYE and become self employed, so here’s a summary of what you need to do to keep the taxman happy (and a reminder for those of you who are experienced locums).
(This article was first published in the NASGP Newsletter August September edition 2011)
Set up as self employed:
- Notify HMRC of the start of self employment
- Set up Class 2 National Insurance contributions
- Consider if Class 4 National Insurance contributions will need to be deferred (you may need to seek professional help with this)
Record keeping:
HMRC are threatening to visit a large number of small and very small businesses to check that records are up to date and accurate. Failure to keep records can result in substantial fines (up to £3,000 per year of assessment) so these visits are an easy way for a cash-strapped government to collect penalties from unsuspecting businesses.
You should keep:
- Copies of invoices issued in respect of work done
- Receipts for expenses incurred
- Mileage log
- Bank statements showing locum income received and expenses paid
- Paying in books and cheque stubs
- Credit card statements where used for the business
- Copies of pensions paperwork (forms Locum A and B)
- Copies of payslips, P45s and P60s (and possibly P11d – return of benefits) in respect of employment work.