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GARRY WHITE AND COMPANY CHARTERED CERTIFIED ACCOUNTANTS
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PENALTY FOR LATE NOTIFICATION Anyone starting up as self-employed must now register with the Inland Revenue within 3 months - starting from the last day of the month in which self-employment began. So anyone who began self-employment in January 2001 or earlier and does not register by 30 April will incur the new penalty of £100 from 1 May. The existing requirement for the newly self-employed to notify the Inland Revenue immediately of their liability to pay Class 2 NIC's will be backed up by the new £100 penalty if they fail to register on time without a reasonable excuse. The relevant secondary legislation can be found in SI 0045 The Social Security (Contributions) (Amendment) Regulations 2001. Anyone with earnings below the small earnings limit (currently £4635 a year) must register, but they will not have to pay the new penalty if they register late. The Revenue has offered more help for those setting up their own businesses. However this is coupled with the introduction of the new £100 fine for those who fail to register with the Revenue within the 3 month time period. Some of the initiatives for start-ups include the registration process being made easier by making the existing registration form shorter and more straightforward to complete and providing telephone registration facilities. The registration for Class 2 National Insurance Contributions (NIC's) will also be treated as notification for tax and Class 4 NIC's purposes - so that the newly self employed will only need to notify the Inland Revenue once.
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