You should register as soon as you start working for yourself. If you fail to register within the first three months of self employment, you may be liable to a penalty. And if you don't register and aren't paying tax, you will be breaking the law and could be liable to further penalties.

We have all the registration forms and will be happy to assist you in their completion

Most self employed people pay two classes of National Insurance contributions:

• Class 2, paid at a weekly flat rate and
  
• Class 4, paid on profits and gains at or above a set level

This applies to all people who are:

• Normally self employed and
  
• Aged 16 or over and
  
• Under state retirement age (60 for a woman, 65 for a man)

If you don't pay or fail to keep your NI contributions up to date, you could lose out on your future entitlement to benefits or a state retirement pension. By law, you must pay your contributions and the debt could be enforced through the courts if you fail to pay what's due.

Class 2 contributions

These are weekly flat rate payments, currently £2 a week, which count towards Incapacity Benefit, state retirement pension and Widows benefit. Most clients find it convenient to pay by DDR.
Ask us for the form

Class 4 contributions

If your profits are over a certain amount, you may have to pay class 4 contributions as well as class 2. You normally calculate the class 4 contribution when you fill in your tax return.
We will calculate any class 4 contribution for you

Some people may be exempt or allowed to put off paying Class 2 contributions. These include:

• Anyone that's not earning enough
• Married women or widows with reduced liability
• Anyone over state pension age
• If you are ill
• You have more than one job
• You are both employed and self employed
  

We want to make sure that you pay only what you owe - that means the right amount of tax and National Insurance contributions at the right time. If you don't keep proper records, you may not be able to prove your income and expenses - and that could mean paying more tax than you need to.

Keeping records also makes sound business sense. It may seem like a challenge, particularly when you're starting out, but keeping good records will bring real advantages to your business. Get a proper system in place from the outset, and update the information regularly.

By law you must keep records of all your business income and expenditure. You need to keep records for at least five years from the latest date for sending back your tax return, as the Inland Revenue may need more information or want to see the actual records. Keeping good records will also help you fill in your tax return.

It makes sense to do it properly and make it as easy for yourself as possible. We can help you do this.

You must keep all records for at least five years from the latest date for sending back your tax return. You may need to look back at them yourself, and the Inland Revenue may need to see them if there is any question over your tax.