Self Employed full/short 01 - Did you have an annual turnover of £85,000 or more?

To watch a short YouTube Clip on 'Do I need to register my business for VAT?'.

Turnover consists of your total sales, takings, fees or money earned by your business for the period up to the date your books and accounts are made up to. It also includes all taxable coronavirus support payments that you were entitled to and received.

Turnover includes:

• cash or cheque
• fees, tips and commissions
• the value of any payments 'in kind', that is not payment by cheque or cash, for work done or goods sold
• money owed to you for work already done
• if you are using cash basis only include the money you actually received in the tax year

If your annual income, including any taxable coronavirus support payments, was more than £85,000 or if not, you were within the Managing Serious Defaulters (MSD) Programme for any part of the year, select 'Yes', otherwise select 'No'. If it was £1,000 or less, read the 'Trading income allowance' below.

If you've been told that you are within the MSD Programme you should complete all applicable expenses boxes. If you've been told that you're the subject of the additional reporting requirements you must also complete the balance sheet section and attach the detailed profit and loss account and computations with your tax return. Identify and explain the nature and amount of any figures contained in those accounts that cannot be vouched by physical or electronic records made at the time that the underlying transactions took place, or include confirmation that no such figures are included.

Trading income allowance

Receipts from self-employment and miscellaneous income of up to £1,000 are exempt from tax and do not need to be reported on a tax return, unless they are from a connected party or include a Self-Employment Income Support Scheme grant. This new exemption applies to income that would otherwise be included on your tax return for the year ended 5 April 2021, even if it arose in an earlier year.

The trading income allowance of up to £1,000 can be split across more than one business and against miscellaneous income.

If you choose to complete the 'Self-employment' section because:

• you do not want to claim the allowance as your allowable expenses are higher than your turnover and you want to claim relief for the loss - calculate your profits by deducting allowable expenses and allowances. If you do this do not complete the trading income allowance box
• you wish to voluntarily pay class 2 National insurance contributions. Complete the 'Details for …..' page and answer 'Yes to Do you want to pay Class 2 NICs voluntarily' in the Class 2 NIC's section
• you are a subcontractor and want to claim back tax deducted under the Construction Industry Scheme (CIS). Complete 'Details for …..' page and enter a figure in 'Deductions on payment and deduction statement from contactors - construction industry subcontractors only' field
• you expect your turnover to exceed £1,000 in the next year, select 'None of these apply' and only complete the sections 'Details for …', 'Accounting details for …' and 'Date your books or accounts are made up to'
• you want to preserve your record of self-employment, for example to support an application for Maternity Allowance select 'None of these apply' and you will need to complete the sections 'Details for …', 'Accounting details for …' and 'Date your books or accounts are made up to'
• you would like to claim Tax Free Childcare based on your self-employment income select 'None of these apply' and you will need to complete the sections 'Details for …', Accounting details for …', 'Trading income allowance' field and 'Income for …'

If your total receipts from all self-employment and miscellaneous income were over £1,000, or include a Self-Employment Income Support Scheme grant, complete the 'Self-employment' section by either:

• claiming the allowance in the 'Trading income allowance' field against your total receipts from self employment - if you claim the trading income allowance, you cannot deduct any allowable expenses or claim any other allowances. You cannot claim this allowance if your receipts are from a connected party
• calculating your trading profits by deducting allowable expenses and allowances. If you do this, you cannot claim the trading income allowance

For this purpose, total receipts from self-employment include any entries in the 'Turnover', 'Any other business income', 'Total balancing charges' and Goods and/or services for your own use fields.

For more information on the trading income allowance, go to Tax-free allowances on property and trading income.