Declaring

supermonkey

I've been told that if starting a business in say February, since theres 3 months to declare, a tax return won't be needed until 2011.

If so, is any income before april 2010 counted towards the 2010/2011 tax year?

What should be declared on tax credits?

Thanks!

fengirl_2

No, this is not correct.
First of all, the 3 mth grace period has been abolished. You now have to register as self employed as soon as you start receiving the income.
Second, you are assessed on the profit for the year, so if you started in October 2008 and didnt register until October 2009, you would still be assessable on your profit for 08-09 as well as 09-10.

supermonkey

when was the 3 month period abolished?

I wasn't talking about leaving it a year! Just making sure that income from say March 2010 would be included in the 09/10 tax year even if declaration wasn't made until after april

BoGoF

Don't know if you are confusing the 3 month period for registering for NI - if you don't register within 3 months of commencement then £100 fine.

If you are talking accounting period then you are taxable on the income from February to end of tax year. So if you do start Feb 10 you will get a 2009-10 Tax Return to be sent by by 31 January 2011 at the latest.

fengirl_2

The 3 mth grace period was abolished at the start of this year - this applies to NI as well. I wasn't implying that you were not going to declare for a year, I was just making the point that it doesnt matter when you register, your accounting period starts on your first day of trading and your first year of assessment would be in the year in which that date falls.

Rolo_Tomasi

When you first start being self employed your income for any tax year is calculated from the date of commencement to the following 5th April. So if you started on 1 January 2010 then you would have to declare income for the period from 01/01/10 to 05/04/10 on the 2009-10 Tax Return. This Return would have to be filed by 31 January 2011.

fengirl_2

Rolo is not quite correct. On your first year's self assessment, you declare the proportion of your profits relating to that tax year out of your first years' profits. You are not required to make a separate set of accounts for the period from date of commencement to 5 April!