Any of you self employed, need quick advice about Tax Return

[ade28uk]

I am doing my Tax Return as I am self employed.

This is the second Tax Return I am doing.

On my very first tax return the period was 15/08/04 - 14/08/05 as I was just starting out.

So I worked out how much I earned and minused anything I spent out which left me with profit between this period.

My new Tax return wants to know my income from 6 April 2005 to 5 April 2006

Whats confusing me here is that my first tax return was finished on 14/08/05

So do I just take my new invoices from the 09/2005 up until today to work out my tax,

or

do I have to go from the 6 April 2005 up until April 2006?

I hope this makes sense.

 

[Kylies Stunt Arse]

The tax year is always 6th April - 5th April. Last year you should have only gone up to 5th April. I suggest that you take from where you ended last years up to 5th April to get yourself back on track. It may be worth speaking to an accountant though.

There are a couple that post on here that may be able to help you.

 

[Gazwag]

First period should have been to 5th April 2005, ie from 15/8/04 to 5/4/05.

2006 Return is then based on your first full year ie 15/8/04 to 14/8/05.

The profits you have then been charged tax on twice on is called "overlap relief" and is carried forward until you cease trading when it is set against the final periods profits.

Therefore you need to make an "error or mistake claim" to amend your 2005 return to the correct figures.

The short first period can be worked out by taking your profit for the year to 15/8/05 and x 233 and /365

Alternatively, re-work the figures to 5/4/05 and then the 2006 return can be based on the year to 5/4/06. Either way the 2005 return is wrong but it is easy to amend, once you have worked out the correct figures either write to or ring your tax office

Hope that helps

 

[ade28uk]

Bollox looks like I screwed it up then.

Ok so just to go over this again.

My very first TAX return I sent in was from the 15/08/04 - 14/08/05

I worked out how much I earnt and how much I spent out in this period which left me my profit. I then paid my tax owing to the IR

So what I have to do now is get all my invoices from 6th April 2005 to 5 April 2006 work out my total invoices MINUS my outgoings to leave with my profit.

This should then start to bring me inline and will be easier to handle each year, like you suggested.

So the next time I do my tax return it will be from 6th April 2006 - 5 April 2007

I will get an accountant later on.

 

[Lush]

I am a financial DUNCE and self-employed. I did my tax return online yesterday. It is fantastically easy.

If memory serves you can have whatever accounts period you like and knowing the site they will probably hold your hand through how you cope with it. I think there is also the option of saying that you have already declared some of this year's income/expenses.

Unless your accounts are really complicated, I'd give it a go online. If you stuff it up or are not sure there's a telephone Help Desk. Remember it's cheaper and easier for them too to have as much as poss online rather than paper forms, so they've bent over backwards to help.

You have to register and they send you a User ID in the post which takes a week or so, so don't leave it until the last minute. In 2004/05 I did it online and at the end of the process it said i was eligible for a tax refund, asked for my bank account details and paid it in automatically!

 

[Gazwag]

Bollox looks like I screwed it up then.

Ok so just to go over this again.

My very first TAX return I sent in was from the 15/08/04 - 14/08/05

I worked out how much I earnt and how much I spent out in this period which left me my profit. I then paid my tax owing to the IR

So what I have to do now is get all my invoices from 6th April 2005 to 5 April 2006 work out my total invoices MINUS my outgoings to leave with my profit.

This should then start to bring me inline and will be easier to handle each year, like you suggested.

So the next time I do my tax return it will be from 6th April 2006 - 5 April 2007

I will get an accountant later on.

That will be the easiest approach, but make sure you also re-work your first period from Aug to April 05 so you just have the profit for that period only and not for the whole year, you will then be due a tax refund for the year to 5/4/05, which you can then set against the tax you will owe for the year to 5/4/06.

 

[ade28uk]

Ok all sorted I have worked out my profit for 15/08/04 - 05/04/05

I have also worked out my profit for
06/04/05 - 05/04/06 which is for the curremnt TAX return

I have put all new invoices and reciepts in the following category
06/04/06 - 05/04/07
This will be next years TAX Return

I will now have to write a letter as one other user said there is an overlap so I should be due some tax back.

These TAX returns do my head in. Its worse than computers and this just a basic tax return as well.

 

[Gazwag]

I will now have to write a letter as one other user said there is an overlap so I should be due some tax back.

Write telling them you can to make an "error or mistake claim" in respect of your 2005 Tax Return and explain you included the wrong figures; being for the whole year and not just to 5th April, give them your correct figures (it would help to tell them the correct figures in each box on the return rather than just the new profit figure) and they will then re-assess your tax.

 

[ade28uk]

Thanks for you help Gazwag and everyone else. The mindfield of tax is now sorted and most importantly my accounts are inline.

 

[The Clown of Pevensey Bay]

Don't EVER lose your online filing user name and password, though. They're both about 16 letters long, and HMRC send you them, and you can't change them.

Bloody hell I'm glad I'm not self employed any more.