When an employee decides to strike out on their own and set up their own business, there will be certain stages in the journey as far as tax is concerned.

Registering for self assessment

As an employee, an individual’s salary is subject to PAYE – their employer deducts income tax and Class 1 National Insurance contributions (NIC) so taxpayers need not worry about anything. However, once they become self employed there is no employer, so they need to account for income tax and NIC themselves.

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