{"id":786,"date":"2022-07-10T08:07:18","date_gmt":"2022-07-10T08:07:18","guid":{"rendered":"https:\/\/taxtribe.co.uk\/?p=786"},"modified":"2022-07-10T08:07:18","modified_gmt":"2022-07-10T08:07:18","slug":"tax-guide-for-self-employed-builders","status":"publish","type":"post","link":"https:\/\/taxtribe.co.uk\/tax-guide-for-self-employed-builders\/","title":{"rendered":"Tax Guide For Self-Employed Builders"},"content":{"rendered":"

Many people who work in the construction industry are self-employed. That\u2019s not surprising, because the advantages are obvious. If you\u2019re self-employed, you can set your own schedule, choose your own clients, and accept jobs at home and abroad, depending on how much you want to travel. For many construction professionals, it\u2019s a no-brainer.<\/span><\/p>\n

However, self-employment comes with responsibilities. You are completely in charge of your own tax and national insurance, and this means that it\u2019s up to you to make sure your relationship with HMRC is a good one. In this post, we\u2019ll look at the most important things you need to know as a self-employed builder.<\/span><\/p>\n

Duties and deadlines<\/b><\/p>\n

When you\u2019re self-employed, you need to deal directly with HMRC. It\u2019s extremely important to make sure that you declare all your income in the right way and by the correct deadline. Otherwise, you might find yourself on the receiving end of fines and penalties \u2013 even serious ones. The first step is to know all the key dates of the tax year, which runs from 6 April until the following 5 April.<\/span><\/p>\n

When you start to work for yourself, you will need to register for self-assessment if you are not already registered, as well as for Class 2 National Insurance. You have some time to do this, since you won\u2019t have to submit a tax return until your second year of business. However, you must have registered <\/span>by 5 October<\/b><\/a> in that second year.<\/span><\/p>\n

By the following <\/span>31 January<\/b>, you must submit your tax return for the first year of business and pay any money you owe HMRC. On <\/span>31 July<\/b>, you\u2019ll make a <\/span>payment on account<\/span><\/a> for the current tax year. This amount will be calculated based on your previous year\u2019s income. If you end up paying too much, you\u2019ll receive a refund from HMRC \u2013 if you\u2019ve paid too little, you\u2019ll make up the difference with your next tax return. This will be the standard routine in future years: two annual payments on account, plus either an additional payment or a refund.<\/span><\/p>\n

Self-employed builders can also sign up to the <\/span>Construction Industry Scheme<\/span><\/a>. This makes life easier by allowing your clients to deduct tax from your payments and pass it along to HMRC. If too much is deducted, you\u2019ll receive a refund.<\/span><\/p>\n

What counts as taxable income?<\/b><\/p>\n

You must declare all the income you have received over the whole tax year. It\u2019s surprisingly easy for HMRC to figure out that someone\u2019s lifestyle and reported income don\u2019t match, and they take tax evasion very seriously.\u00a0<\/span><\/p>\n

However, while you declare all your income, you should also make sure to declare your expenses. HMRC needs to know how much of your income is profit, and how much of it goes out on necessary costs for running your business. Tax-deductible expenses might include work equipment and protective clothing, fuel and insurance for your work vehicle, and even the cost of hiring an accountant to advise you on declaring your expenses.<\/span><\/p>\n

If you\u2019re considering freelancing in construction, our friendly online accounting service can help! Just <\/span>get in touch<\/span><\/a> for a free, personal quote.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Many people who work in the construction industry are self-employed. That\u2019s not surprising, because the advantages are obvious. If you\u2019re self-employed, you can set your own schedule, choose your own clients, and accept jobs at home and abroad, depending on how much you want to travel. For many construction professionals, it\u2019s a no-brainer. However, self-employment…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"rank_math_lock_modified_date":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-786","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/taxtribe.co.uk\/wp-json\/wp\/v2\/posts\/786"}],"collection":[{"href":"https:\/\/taxtribe.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/taxtribe.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/taxtribe.co.uk\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/taxtribe.co.uk\/wp-json\/wp\/v2\/comments?post=786"}],"version-history":[{"count":1,"href":"https:\/\/taxtribe.co.uk\/wp-json\/wp\/v2\/posts\/786\/revisions"}],"predecessor-version":[{"id":787,"href":"https:\/\/taxtribe.co.uk\/wp-json\/wp\/v2\/posts\/786\/revisions\/787"}],"wp:attachment":[{"href":"https:\/\/taxtribe.co.uk\/wp-json\/wp\/v2\/media?parent=786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/taxtribe.co.uk\/wp-json\/wp\/v2\/categories?post=786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/taxtribe.co.uk\/wp-json\/wp\/v2\/tags?post=786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}