Started Self-Employed Halfway Through the Year? Don’t Assume Your Tax Is Simple

Starting self-employed work halfway through the UK tax year can make your first tax return less straightforward than expected. Your tax position is based on the income and allowable expenses connected with your self-employed activity, but you may also need to take other income from the same tax year into account. So starting in September, for example, does not simply mean “nine months of tax” — the details of when you started trading and what other income you received matter.

One detail that can easily be overlooked is the actual date you started trading. It can be different from the date you registered with HMRC, and getting this wrong can affect when you need to register, keep records and submit your Self Assessment. Your first months in business can also contain expenses incurred before you made your first sale, so keeping evidence from the beginning is important.

Starting mid-year is not necessarily complicated — but assuming there is nothing to report until the end of the tax year can be a costly mistake. Knowing your trading date, tracking income and expenses from day one and checking your HMRC deadlines early can make your first tax year much easier to manage.