Tax for the self-employed Income tax and the self-employed

Keep all receipts and invoices if you're self-employed

You are responsible for declaring and paying income tax on the profits from your business.

When the self-employed pay income tax

You start paying income tax when your profits plus any other income you personally have exceed your tax-allowable outgoings and tax allowances. 

Declaring your income

To work out whether you must pay income tax, you need to fill in the self-employment supplement (SA103) as well as the main tax return. 

Usually this is sent to you automatically once you’ve registered as self-employed.

If you have registered but don’t receive one, you can download it from the HMRC website or get a copy by calling the HMRC orderline (0845 900 0404).

Supplements

There are now two supplements – a short one and a full one.

You can fill in the short one if your turnover for 2009-10 was £68,000 or less and no complications, such as a change of accounting date, apply.

However, you cannot use the short one if your accounting period is not the same as your basis period, so you may not be able to use it in the first year. It’s up to you to make sure you get the right supplement.

If you're not a sole trader

The supplement and the advice in this section apply to people who are sole traders. If you are in partnership, you need the partnership supplement. If you run your own limited company, you are an employee of the business and need the employment supplement.

You start to pay income tax when your profits, plus any other incomes, exceed your tax-allowable outgoings and tax allowances.

 
For more information if you're self-employed, see our book Working for Yourself.

Latest money news

For daily consumer news, subscribe to the here. If you have an older web browser you may need to copy and paste this link into your newsreader: http://www.which.co.uk/feeds/reviews/news.xml. Find out more about RSS in the Which? guide to news feeds.

Or sign up for our .