You may have a number of casual or part-time activities, and in
some may be an employee and in others self-employed. It all
depends on the facts.

Financial obligations of Business: self-assessment tax liability and National Insurance contributions.

When you are self employed, tax is worked out differently the individual has to pay their own  income tax on their earnings. You may require an accountant to do this. There are tax relief’s and allowances that can be claimed. Self employment requires register with the Inland revenue service.

VAT is a tax on goods and services which is paid to Customs and Excise. VAT depends on the type of business that you run.

As a self-employed person payment of NIC is self organised for you and employees.

Business rates are paid to the local authority on most business premises. It is a percentage of the estimated rental value of the premise.

 

It will normally be your employer’s responsibility to deduct tax and National Insurance contributions from your pay under PAYE and pay it to the Inland Revenue.
Self-employed You are responsible for your own tax and National Insurance
contributions. This means

• telling your Inland Revenue office if you haven’t already done so, that you are in business
• telling your Inland Revenue office about all your income. Once you have told us that you are in business, The government will normally send you a Self Assessment tax return each year to enable you to do this. Even if government do not send you a tax return for that year, you must still inform them of money earned.
• paying the tax
• paying Class 2 National Insurance contributions. The government will send you a bill every 13 weeks in arrears, unless you choose to pay monthly by direct debit
• paying Class 4 National Insurance contributions.
• Being self-employed also affects
• the benefits you can claim, such as unemployment benefit
• other rights, for example the right to maternity leave, or to a redundancy payment, notice rights etc.
• liability to the public for the work you do for them.