½Û×ÓÊÓƵ

Self-employment ― overview

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance

Self-employment ― overview

Produced by a Tolley Personal Tax expert
Personal Tax
Guidance
imgtext

This guidance note provides an overview of the type of income which is regarded as self-employment and associated key tax issues.

Meaning of a sole trader

When an individual starts to work for themselves on their own they are self-employed and classified as a sole trader. The likely characteristics are:

  1. •

    the person sells goods or services to make a profit

  2. •

    the person takes responsibility for the success or failure of the business

  3. •

    they will have several customers or clients they are working for at the same time

  4. •

    they can hire other people to work in the business and pay them out of the profits of the business

  5. •

    items of equipment used in the business are provided by the individual

  6. •

    the responsibility for correcting any defective work lies with the individual

These characteristics could also apply if an individual sets up and owns a limited company, but for tax purposes the individual is not treated as self-employed ― they are an owner and employee of the company. In addition, a person

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
Powered by
  • 26 Apr 2024 09:23

Popular Articles

Associated companies ― from 1 April 2023

Associated companies ― from 1 April 2023Implications of associated companiesFrom 1 April 2023, the rate of corporation tax that a company is subject to depends on the level of its augmented profits. The rate of tax is based on a comparison of the company’s augmented profits against the corporation

22 Mar 2021 10:21 | Produced by Tolley Read more Read more

Spouse exemption from inheritance tax

Spouse exemption from inheritance taxArguably, the most important inheritance tax exemption is the spouse exemption from inheritance tax.There is no IHT to pay on gifts from husband to wife and vice versa, or from one civil partner to the other (referred to collectively in this note as ‘spouses’).

14 Jul 2020 13:56 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more Read more

Loans written off

Loans written offCompanies sometimes provide directors, employees or shareholders with low interest or interest-free loans either as part of the reward package or on special occasions to help the individual meet significant expenditure. The employment income implications of these loans are discussed

14 Jul 2020 12:11 | Produced by Tolley Read more Read more