If you're self-employed, what system should you utilize to file your tax return?
Okay, so when you're working for yourself, you're essentially running your own business, and that means you're responsible for handling your own taxes. The UK tax system has a specific process for this, called "Self-Assessment." Think of it as you assessing your own income and calculating the tax you owe to HMRC, Her Majesty's Revenue and Customs. You do this by filling out a tax return each year, detailing your income and expenses. This system was introduced to streamline the tax process for the self-employed and those with income not taxed at source. Now, PAYE, or "Pay As You Earn," is for employed people where the employer deducts tax and National Insurance directly from your wages. National Insurance is a contribution towards benefits like the state pension, but it's not the system for filing your tax return. And self-checkout? Well, that's just for the supermarket! So, because you're independently figuring out and declaring your income, "Self-Assessment" is the system designed for self-employed individuals to file their tax return.
Keep in mind that self-employed individuals are responsible for their own taxes, hence the term 'self-assessment'.