PEOPLE opting to become their own boss without letting the taxman know could be hit with a £100 "fine", the region's chartered accountants have warned.

Those switching to self-employment must notify HM Revenue & Customs within three months of the end of the month in which they started trading, after which they could face a penalty.

For example, someone who started trading on May 15 has until August 31 to register.

Keith Williamson, small business specialist at the Northern Society of Chartered Accountants, said: "The first few months of a new start-up can be a pretty hectic period, when there are lots of different things to think about.

"But it is important that those deciding to work for themselves establish their correct status for tax and National Insurance (NI) purposes. Registering as self-employed is a relatively quick and easy process - and will avoid the risk of a penalty."

Mr Williamson, partner at Tindle Williamson in Whitley Bay, added: "Sometimes, people might be unsure of their status, especially if they have more than one source of income.

"For example, there is nothing to stop someone with a salaried job doing part-time work in the evenings or at weekends, which could mean they are classed as employed and self-employed at the same time."

Individuals can register by filling in form CWF1, online at www.hmrc.gov.uk or by phone on 08459 15 45 15.

Remember to keep a copy of the CWF1 or a note of the details given over the phone.