Why Do You Need to Check Employment Status for tax?

check Employment Status for tax

Why check Employment Status for tax? 


You need to find out your employment status to know whether you’re a worker, employed, or self-employed for tax implications and employment law as per HMRC. As each category contains different tax obligations specified by the UK’s government.


How to determine Employment Status?


Your employment status tells your rights and responsibilities in the workplace.


You can know it by:

  • Employment Contract type
  • the way you receive your payment
  • The person who is liable to pay your tax
  • rights and responsibilities you and your employer possess.


While starting your own business, it is imperative to determine your employment status. Most probably, you’re going to fall under the category of self-employed if you are operating a business on your own and you’re responsible for its failure and success.


If you’re still confused, we can help you!


Requirements to be Self-Employed:


To be classified as self-employed in the employment status, you need to:

  • Take the whole responsibility of your business
  • Have at least two customers
  • Finalize what, where and when you do
  • Own a right to replace a person to operate the business on your behalf
  • Provide your own tools and equipment to the employees


You can, simultaneously, be self-employed for your business and an employee for others. You can find out your employment status through Check Employment Status for tax. In addition, you can check out the supporting guidance by HMRC for using this tool effectively.


After submitting the information in this tool, if you are classified as self-employed then you have to register as self-employed with HMRC. 


Afterward, you are required to keep track of all of your expenses and income, do self-assessment tax returns, pay tax and national insurance that is due. 


Need Further Help:


We hope you have understood why it is necessary to check Employment Status for tax.

For assistance, we can provide you detailed advice and support on all the taxes under employment status. You can contact us anytime!

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