Tax Obligations of the Self-Employed

To put it simply, you are a self-employed person if you work for yourself and are not employed as an employee. This article will tell you more about the meaning of self-employment and the tax obligations.

Am I a Self-Employed Person

Without any relationship of master and servant, if your income is derived from the buying and selling of goods, or from providing professional or personal services, you are considered as carrying on a trade, business or profession and a self-employed person.

A self-employed person may be a sole proprietor or a partner of a partnership business.

Tax Obligations of the Self-Employed

As a self-employed person, you are chargeable to profits tax on the assessable profits of your sole proprietorship or partnership business. You need to:

  • keep sufficient business records for at least 7 years;
  • prepare accounts based on your accounting records;
  • complete and submit a tax return for reporting business profits or losses;
  • notify the Inland Revenue Department in writing about your liability to tax, not later than 4 months after the end of the basis period for the year of assessment concerned, unless you have already received the tax return from the Department;
  • notify the Inland Revenue Department about the cessation of your business within 1 month of cessation;
  • notify the Inland Revenue Department about your change of address within 1 month of the change; and
  • pay the tax.

You can know more about the tax obligations of the self-employed through the following links:

Notification of chargeabilityMore on notification of change of postal addressA guide to keeping business recordsAdmissibility of business records kept in electronic form for tax purposesBusiness registrationTax obligations of employers

If you receive a tax return from Inland Revenue Department, you must complete and submit it in time even if your business had ceased, was inactive or operating in losses.

Last review date: May 2017