Self-employment issue

[Deleted member 312035]

Hello everyone,

I am looking for some advice on self-employment.

I was around a friend and I’ve mentioned that I am self employed and need to send my tax return. At that point, the guy told me he is also self-employed but doesn’t know what that actually means and he didn’t know he need to register and declare his income. Prior to this he worked as employee and didn’t had to worry about tax and NI. This guy is not British and he doesn’t understand much English either. Now I explained him what it means but I do t know how to help him.

He has been working as self-employed for around 3 years now earning on average 40.000£.

Would any of you know what the process to register and pay whatever he owes would be considering it’s quite a long time since he started working as self employed? Also, would it be possible for someone else to speak with HMRC on his behalf? (As I said he doesn’t speak English)

 

[SteveHa]

Step 1 is to register for self-assessment - https://www.gov.uk/log-in-file-self-assessment-tax-return

Following which HMRC will issue notices to file Tax Returns, which will enable your friend to bring his tax affairs up to date. There is a possibility that he will be charged penalties (based on the amount of tax due) for failure to notify chargeability under S7 TMA 1970.

He can appoint someone to speak to HMRC on his behalf, but HMRC will require appropriate authority to be in place, first. If this is to be a one off, he can probably call them, go through security, and give verbal authorisation for someone to take over the call. If it's a more permanent authority then this is done either online, or by completing form 64-8 and sending it to HMRC.

 

[Bob Morgan]

Plane Ticket?

 

[Gecko001]

If he started trading on the 6th April or just after he will legitimately not have to send in his tax form almost two years (21 months and a bit actually) after starting trading which will make him late by just over a year.

 

[Newchodge]

As a matter of interest, do you know if he is really self employed or does he work for someone who calls him self employed?

 

[SteveHa]

5 October following the tax year end is the registration deadline. Penalties for S.7 failures are tax geared (if they are charged at all). If there's no tax to pay, for example, then the penalty will be NIL.

 

[paulears]

I fail to see how anyone earning 40 grand doesn't know that tax exists and hasn't done it properly. Sounds like he knew perfectly well he was working on the black side of the fence, and didn't bother.

He's probably not self-employed at all - if he's not been keeping books, then all his income won't have any balancing outgoings, so he'll cop it, tax wise.

 

[heidi hine]

It maybe the case that your friend is getting paid via an umbrella company and is in the belief he is self employed?

 

[Deleted member 312035]

Thank you everyone for your replies. He knew he is self employed, that’s what the company told him.

His problem is that he didn’t know what that means and what he was supposed to do about it.

I’m going around tomorrow to have a look on his statements. I suppose he should also have some invoices from that company to justify the money he was paid.

 

[heidi hine]

Hi Robert,

He should have remittances from the company that paid him, showing the full breakdown of the payments issued to him.

Let me know if you need any help

 

[Newchodge]

He knew he is self employed, that’s what the company told him.

What company? The company for whom he does all his work?

 

[heidi hine]

The company that is making the physical payment into his bank account, whether this be an agency or end client.