Registering for self-assessment (new biz) - am I late / will I be fined?

[celjuta]

Hi, I'm sorry if you've seen this question a billion times before - I searched through the forums before signing up but I haven't found a similar one recently so I hope it's OK to ask this here.

I started a tiny hobby business while on furlough in August last year. I have not yet registered with HMRC though because I am also in the middle of a mortgage application with my partner and I was waiting until I would move to my new address to save the bother with address changes and not receiving potentially important letters (and also I'm really worried it might get flagged up if they check my income against HMRC or whatever and I really really want to move.)

I have been told by various people that it would be OK to wait since a self assessment is not required if I'm turning over under £1000. The mortgage application dragged out however and since I kept waiting, the April deadline is creeping up slowly. Although my turnover is still way under this £1000 trading allowance, I should probably notify HMRC, right? I just don't have to fill in the self-assessment under this amount, but I definitely have to tell HMRC, don't I? I mean, my website is open and I did take money in on the first week it opened in August. It looks like a business and it acts like one and I'm advertising it on social media and everything, so I should probably do it right now if I want to receive my UTR by the April deadline, am I right?

However, I also read somewhere that I should have done this within three months of starting trading. I had no idea about this rule, I only knew about the April deadline. (It is April, right? Not 31 January, that was for people started before April last year, right? Yes, I'm this clueless, I'm sorry.)

My question is, how stupid am I? Would I be fined now? And, since my turnover is so low, would it just be a £100 fixed late penalty thing? Because if is, and it's definitely going to happen, I feel like waiting until we move now lol, at this point I'd rather pay the fine than lose the house but I'm very desperate to move and probably also very stupid so please be nice.

Thanks for your help.

 

[Mr D]

Under 1000 no need to register. Over 1000 then yes - but have time afterwards to do so.
Quite a while - up to 18 months. January is a date people remember as its the deadline date to file accounts for the previous tax year.

 

[celjuta]

That's helpful, thank you. I didn't know about the 18th months. I'm a bit confused though - I was told today (by an accountant, not hired, just at a general information call), that if I register later than April this year, and HMRC will see that I was trading since August 2020, I could get fined? Were they wrong?

And where is the "register within 3 months of starting" coming from then? (I wasn't told about this but I read about this on various accountant's websites and in threads on this forum from years ago.)I can't find this on the government's official website though. Because, I'm late already, if the 3 months is the rule.

However, if January is the important date, and my turnover is under £1000 and will be on the 31st January as it is next week, then I'm fine, and I will be, if I register any time within 18 months or whenever I start turning over £1000 (hopefully sooner?)

I'm really sorry, I'm very confused. I'm normally good with admin! But I'm new to entrepreneurship and feel stupid then worry too much and I try to get too much information that contradict each-other.

 

[WaveJumper]

Read here:
https://www.gov.uk/set-up-sole-trader

 

[celjuta]

Thanks! I remember seeing this page before but I couldn't find it again. This bit:

• you earned more than £1,000 from self-employment between 6 April 2019 and 5 April 2020

I presume the deadline for this is 31st January, right? As I only started trading in August 2020, this does not apply to me. And if this changes to 2020 and 2021, and if I turn over more than £1000 until April, then I have until January next year to register, correct? This would be a huge relief if that was true (and sorry I might be actually a bit thick lol).

 

[WaveJumper]

Yes correct if you started in August 2020 the tax year has not ended yet so no need to panic just yet best of luck with your new venture

 

[celjuta]

Brilliant, thank you so much!

 

[Scalloway]

The deadline for registering for self employed if you started in the 2020/1 tax year is 5 October 2021. I have read on accountant's forums that as long as you file your tax return and pay your tax by 31 January 2022 HMRC won't be bothered.

 

[DWS]

The deadline for registering for self employed if you started in the 2020/1 tax year is 5 October 2021. I have read on accountant's forums that as long as you file your tax return and pay your tax by 31 January 2022 HMRC won't be bothered.

Agree with Scalloway any penalties are tax geared so as long as the return and tax is sorted by 31/01/2022 then no problems

 

[celjuta]

October for registering, January for tax return. I think I got it, many thanks! I want to register way earlier anyway but I the October deadline makes it possible that I might be able to move house before. Thank you!

 

[Mr D]

Oh and welcome to the ranks of business owners.

A business can be annoying, it can be tiring, it can be maddening. And it can stretch you, can force you to grow beyond what you were, and can be great fun.
And its your baby - you help it grow, you help shape it, you rejoice in its milestones.

The money from business helps. Can be considerably better freedom and income eventually than relying on someone else for what scraps they decide to give or what time they will allow you off.
Getting there is a journey - some don't complete the journey, some never start even.
Succeed or fail you can learn, improve, and enjoy yourself.

 

[Spur Support Services]

Your first step is to register for a Government Gateway services.
Setting up a Government Gateway account does not trigger any tax return obligations.

You don't have to be Self Employed to get yourself a Government Gateway account, in fact I think its advisable for everyone as it gives you a level of control and visibility over you personal tax.

You can set up the account at any time and it will give you access to other useful areas like Employment Tax Coding and NIC history (well I find them useful).

I'm really looking forward to when my teenage daughter receives her NI number as setting up her HMRC Government Gateway account will be one of the things that I help her with.
OMG being the child of an accountant is such a thrill. The saddest thing is that I'm actually really excited about it!

Anyway, to get yourself a Government Gateway account go to https://www.gov.uk/log-in-register-hmrc-online-services.
You want to set up a Personal Government Gateway Account.
You can then set up your Self Assessment business identity from there when required using those Government Gateway sign in credentials

 

[Mr D]

Your first step is to register for a Government Gateway services.
Setting up a Government Gateway account does not trigger any tax return obligations.

You don't have to be Self Employed to get yourself a Government Gateway account, in fact I think its advisable for everyone as it gives you a level of control and visibility over you personal tax.

You can set up the account at any time and it will give you access to other useful areas like Employment Tax Coding and NIC history (well I find them useful).

I'm really looking forward to when my teenage daughter receives her NI number as setting up her HMRC Government Gateway account will be one of the things that I help her with.
OMG being the child of an accountant is such a thrill. The saddest thing is that I'm actually really excited about it!

Anyway, to get yourself a Government Gateway account go to https://www.gov.uk/log-in-register-hmrc-online-services.
You want to set up a Personal Government Gateway Account.
You can then set up your Self Assessment business identity from there when required using those Government Gateway sign in credentials

Your teenage daughter already has an NI number. She has had it likely since a few weeks old.
Decades ago the NI started being allocated soon after birth, enabling benefits for children to meet same requirements as adults.

Also avoids the situation of being allocated the same NI number as someone else.

 

[Spur Support Services]

Your teenage daughter already has an NI number. She has had it likely since a few weeks old.
Decades ago the NI started being allocated soon after birth, enabling benefits for children to meet same requirements as adults.

Also avoids the situation of being allocated the same NI number as someone else.

I know, but I'm hoping that she gets a letter from like we did when we were young when we approached 16, so I can bounce in and save the day . Maybe they don't do that now.

Teenage daughters mostly focus on stating how little adults know, so I cherish any moments when I am still needed.

 

[DWS]

I know, but I'm hoping that she gets a letter from like we did when we were young when we approached 16, so I can bounce in and save the day . Maybe they don't do that now.

Teenage daughters mostly focus on stating how little adults know, so I cherish any moments when I am still needed.

I still have my original N/I card from way back in 1984

 

[celjuta]

Thanks for your all the advice! It's been very helpful so far, I will try and do all of this (in the right order!)

Also thank you for the welcome, I'm a bit of an anxious overthinker and I don't like taking risks so I wouldn't say I'm naturally entrepreneurial. But I believe in the things I make, I think I make them well and I enjoy learning new stuff so I look forward to picking up the business skills on the ride.

 

[ClothingRetailer86]

I wouldn't worry about a late declaration at all. It shows you aren't trying to hide anything and it's almost certain you wouldn't receive a fine or anything.

It's if it isn't declared after exceeding traders allowance AND HMRC catch up with you that trouble and fines happen (because to them at that point, even saying you were going to declare it might as well be never going to declare it at all). Even then though, it's only likely fines will happen if it's found there's tax owed.

I've been in a similar boat with moving. I exceeded traders allowance but didn't register with them because I was in the middle of a house move. Then I had problems booking a van due to lockdown and it was a good 2 months after exceeding this allowance that I registered with them.

When applying I even told them on the form that I only exceeded it a few weeks prior. That doesn't matter though because the main thing they care about is being registered and that you are paying the right tax (if any is owed at all).

 

[celjuta]

Thanks for this, it's good to know they aren't as bad as I was told ("guilty until proven innocent" haha). It's a bit anxiety inducing this wait with the house move, we're still waiting for our mortgage and I'm scared to do anything that could affect our application. But it's good to know that I'm not doing anything wrong (yet lol) and even if I was, they aren't that keen to send fines, thanks!