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.
- Tax query? Speak to our experts on the Which? Money Helpline
- Need to fill in a tax return? We can show you how
- Confused about your tax code? Read our expert guide
