You can choose when you work, how much you are paid, and which clients you want to work for.
You might also come under the Construction Industry Scheme (CIS) when working as a subcontractor.
You'll need to register for Self Assessment and file your tax return by 31 January, after the tax year ends.
The 21/22 tax year runs 6 April 2021 to 5 April 2022. So you'd need to file by 31 January 2023.
You will need to get your Unique Taxpayer Reference (UTR) from HMRC. You'll get it through the post after a couple of weeks, so keep the deadline in mind.
Then you'll need to keep track of all your earnings and expenses. Keep photos of receipts and invoices.
We'll soon have a way for you to track your earnings and expenses, super easily.
The Construction Industry Scheme (CIS) allows contractors to pay HMRC the estimated tax that a subcontractor might pay in the construction industry.
If you’re self-employed in the construction industry, it’s worth registering for the scheme. You will then only have 20% tax deducted from your salary.
If you're not registered, your deductions will be 30%. This also means you get a larger tax refund.
CIS applies to payments made by contractors to subcontractors.
If a subcontractor passes three criteria and is registered with HMRC, then they can receive the full gross pay. These are known as the business, turnover, and compliance tests.
For most people, all three conditions are not met. But by registering with HMRC you can still ensure the lower rate of 20% tax is deducted.
If as a subcontractor you then subcontract some jobs out, you will then become the contractor in that situation. You would then need to apply CIS deductions to the payments you are making. So, effectively, you can be a contractor and subcontractor at the same time!
As a self-employed tradesperson you often need to buy your own equipment, tools, and uniform. You might also have business expenses such as legal, marketing, office equipment, and staff expenses.
All of this and more can be expensed through your Self Assessment tax return.
These expenses will be taken away from your earnings, and you only pay tax on your profits.
Expenses can be: tools, uniform, mileage, insurance, marketing, travel costs, and other fees.
Expenses can include:
If you buy an item or good that is used for both your business and in your personal life, then you can only claim allow expenses for the business cost or portion.
Taxd will feel like you’re having a conversation with your own accountant. (Perhaps even more fun.)
With your permission, we link your Taxd account to HMRC to make you even faster.
Tax law can be daunting. So we help you learn and understand it all during your Self Assessment.
Taxd covers more ground than a human accountant. This way, it can help you pay the least tax possible.
Through Taxd, you can submit your return to HMRC and ensure you are maximising all your deductions as well as any reliefs. This includes any private pension contributions you may be making!