Paying taxes (Self-employed). Where do I start. Is is possible to backdate by 3 years? How much will it cost?

Question

I came to the UK from Italy and settled here in May 2004, and started working as a self-employed (part time/casual). I worked from May to October, 2004 and then I stopped (I earned less than £3 000 during the year 2004). Then, in 2005 I started providing interpretation services again, but I only worked from May to October again (earning around £2 500 in 2005). And last year I started working from August 2006 and I stopped this month (February 2007).

Can somone tell me please how many tax years I'm liable to pay tax & NI contributions for? If I started in May 2004, does that mean that my tax first tax year in the UK ended in April 6, 2005? And the second one ended in April 6, 2006, and I assume that my 3rd tax year will end in April 6, 2007?

I have only been accepting cash from my clients for the translation services provided, however, I kept records of my income in a separate notebook. So, can I backdate and pay anything I owe to the govt for the last 3 tax years?

Answer 1

I endorse what the other two answerers have said, but to put your mind at rest, from what you say, you don't owe any tax for the year ended 5 April 2005 and the year ended 5 April 2006 as your earnings are below the tax free personal allowance (assuming you had no other income in those years). You don't say how much you earned up until Feb this year, but if it was less than £5035, then no tax due again.
However, if you have not registered as self employed within 3 months of starting in business, you are potentially liable to a penalty as you should have been paying self employed National Insurance Contributions. However....as this will not amount to much, the Revenue has the power to waive the penalty, or to make it a very small one.
Do as the others suggest and contact the Tax Office. If they then want to start fining you large amounts, get advice from an accountant (you can do this on a one-off basis).

Answer 2

1) At that level of income, you will not have to pay any Tax or NI.

2) If you raise above the threshold, you pay £2.10 per week for Self employed tax

3) You cannot backdate your 3 years

If you register next week, your time from 26 February 07 (or you can go up to 3 months prior) till 5 April 07 will be your tax year. You will get a Self Assesment form which you need to sign and send back to the HMRC by 31 September, and HMRC will calculate the tax for you. If you don't, you will have until End of January to calculate the tax yourself (You'll need an accountant). If you miss that, you will have to pay interest, fines and other nasties.

In short, your first tax year is from the date you registered till the 5th of April, and since you did not register for 04 & 05, you are not elegible for back-payments

A notebook will suffice.

Answer 3

keep ALL reciepts make note of incomings and outgoings and go to the tax office! honestley there are some very helpful people in there thats what they are paid to do as l;ong as you have all paperwork they should be able to guide you thru any difficult bits, you could always call them first incase....

Answer 4

Your best bet is to get in touch with Inland revenue speak to a adviser and they will tell you all you need to know http://www.listentotaxman.com/
http://www.hmrc.gov.uk/rates/it.htm
those two sites will help you hope i have helped