Tax Return - the short or full version - I am confused

R2D2_2

A very brief question from a newbie. I became self employed for the first time in September 2008 and have recently been sent a Tax Return form ( Self Employed - Short version ). As my tax year will run from September 08 to April 09, can anyone please confirm that this is the correct form to return, and not the full version. I ask because the notes accompanying the form sent by HMRC are abit confusing, stating "You must not use the short pages if your accounting period does not start on 6th April 2008" ). Apologies if I am being abit dense on this point, but I would appreciate any clarification on this. Many thanks in advance!

fengirl_2

I am curious to know why you are not making up your accounts for a full year.

R2D2_2

Hi, thanks for the reply. The Tax Return form requests information between the periods April 08 and April 09 - being a newbie to all this I assumed, probably wrongly, that my first return would simply cover September 08 ( when I became self employed ) up to the date requested ( April 09 ). Is that not the case?

fengirl_2

You would normally make your accounts up to 31 August 2009 and then split the income and expenditure on a pro rata basis between the tax years 08-09 and 09-10. This means you either wait for your accounts to be done after 31/8/09 and then do the return (you would have plenty of time), or you can estimate your profit for the year ended 5/4/09 and then amend the return when the accounts are done. You need to do the full return version so that HMRC knows you have split your accounts for tax purposes.

mrkbrrws

You need to read a little further, the notes say:

You must not use the short pages if your accounting period does not start on 6 April 2008 (only if your business has ceased before 6 April 2009)

You may use the self-employment (short) pages for your commencement period of September 2008 to 5 April 2009, as long as the other conditions on turnover etc. are met and the business is continuing.

R2D2_2

Oh, that's a bit confusing! To avoid complicating matters, is not possible for me to submit my tax return covering the period Sept 08 to April 09, and then my subsequent tax returns ( 09-10 ) would run from April 09to April 10? Is that possible? My tax affairs are not particularly complicated ( I hope ) so that would be my preference. Sorry if I've missed the point.... I am a complete newbie to all this.

mrkbrrws

Yes, that is possible and very common. You can prepare your figures up to 5 April each year.

R2D2_2

That's good to hear! If I can have my first return from Sept 08 to April 09 ( covering 6 months ), then have a full year from April 09 to April 10 that will make things alot less complicated for me. I guess there's various reasons why some people might not want their first return to cover less than a year, but in my case I don't have alot of allowances and expenses to worry about, so I am happy to keep things simple.

Are there any major disadvantages to doing a 6 month return as I intend?

Thanks again for your help, and apologies if my questioning seems abit naive, this is all new to me.

mrkbrrws

Remember that you aren't doing a Tax Return for 6 months, you have to include all taxable income for the year to 5 April 2009.

Obviously your self-employment only started in September 2008 but anything you did before then must also go on the form.

Your self-employed profits can be worked out to any date each year as long as you don't keep changing it. However, unless you choose 5 April there are special rules you need to understand to work out your profits for the first couple of years.

negg

"Tax doesn't have to be taxing" :rotfl:

R2D2_2

Thanks again.I wasn't in work prior to becoming self employed so I don't have any earnings / tax to calculate for the period prior to September 2008. I was also intending to keep to April 5th as a convenient date - so hopefully things will be straightforward enough for me to complete my first tax return?