Tax

Visit the HMRC website and register as a self employed driver

• You must register with HMRC for Self Assessment and National Insurance. This should be done as soon as you start as a Canugo Helper but you have until 5 October in your business’s second tax year to register. You can register online as a Self Employed Canugo Helper on the HMRC website.  

• The process can take 10 days to complete upon which HMRC will post you a UTR number (Unique Tax Payers Reference).  Keep this safe as you will need this code to file your Self Assessment Tax Return.  

How to file your taxes

• Self Employed Individuals are responsible for reporting their income to HMRC under Self Assessment by submitting a personal Tax Return by 31 January each year detailing your income as a Canugo Helper, the income tax and Class 2 & Class 4 National Insurance due as well as making a payment for the tax and NI due. 

• Your tax return submitted by 31 January covers the previous tax year (a tax year runs from 6 April to 5 April). So for example, your tax return due by 31 January 2018 details your earnings between 6 April 2016 to 5 April 2017 and this will include your income as a Canugo Helper as well as any other earnings you may have (such as rental income, bank interest or dividends).

• Keep in mind that you are also required to make a payment on account to HMRC by 31 July each year too which is normally 50% of your previous years tax bill, so make sure you budget for this additional payment too.

• Please note that if you already complete a Self Assessment Tax Return, for example because you collect rental income or have savings interest, that you need to complete a Form CWF1 to notify HMRC that you have a new form of income you need to report on.  Again, you can do this online here and you will need your Unique Tax Payers Reference.

Allowable expenses

To register as a Canugo Helper you may need a van, car, bike or scooter and other additional equipment.  The cost of these items would be tax allowable, although if there is an element of personal use on these items you would need to reduce your claim for this.  For example, it is common to use a smart phone for work and personal uses, in this case you should make a reasonable apportionment so you can claim the business use amount against your tax such as 80% business and 20% personal.

Here are some other typical expenses you may have to pay for that can be deducted
against your income for tax purposes:

• Parking charges (fines are not allowed);

• Bike maintenance such as brake pads, tyre replacement;

• Insurance;

• Accountants fees;

• Bank charges of a business bank account.

Recording your business transactions

• You will be paid via bank transfer every Friday, make sure you download your invoices as it will make life easier when the time comes to completing the Self Assessment. 

• Incomplete or inaccurate records will demand more time and hike up any accounting costs. Don’t forget that failure to declare all forms of income could result in prosecution and a fine from HMRC. A simple spreadsheet which records your income and expenses is a great start to keeping your business transactions logged and organised. 

• You must keep your records and receipts for at least 5 years after the 31 January submission deadline of the relevant tax year. For Example: If you sent your 2016 to 2017 tax return online by 31 January 2018, you must keep your records until at least the end of January 2023.