Self-employment

New penalties if you are late in notifying HMRC that you have commenced self-employment

A change in the penalty you will pay if you are late in notifying HM Revenue & Customs (HMRC) that you have commenced self-employment was introduced from April 6.

Up until this date, the penalty was £100 and you had 3 months following the commencement of trade to let HMRC know that you have become self employed.
New penalties for late notification of self-employment

From April 6 the rules have been changed as follows:

Anyone who ceases or becomes liable for Class 2 or Class 3 contributions must notify HMRC immediately.
A penalty may be levied (between 30pc and 100pc of the “lost contributions”) if notice is not given by 31 January following the end of the tax year in which you become liable.

There will be no penalty if you have a reasonable excuse for the late notification.

The new HMRC penalty system has been drawn up to encourage people to take more care when submitting tax returns and other documents, as well as to deter deliberate under-assessment of tax liabilities.