what to pay for first self assesment payment?

yelf

My wife became self employed on the side in Nov 2009 but hasnt paid any tax yet as she only registered recently with HMRC.

On the 31st January 2011 will ahe have to pay tje following:

1)20% tax on her net profit from Nov 2009 to present +
2) half the tax expected to be paid inthe next year?

Will she be able to make her accounting periods run from 31st January?

Pennywise

It's tax years that matter - 6/4 to 5/4 - SA returns are always for tax years, not accounts years, not anniversary of starting up, etc.

In Jan 2011, she has to pay tax on her profits from start to 5/4/10.

If over £1,000, she also has to make a payment on account of half on 31.1.11 and again on 31.7.11.

In Jan 2012, she pays tax due on profits made in year 6/4/10 to 5/4/11, less the two payments on account, and also another half towards 2011/12.

It's far simpler to adopt 5/4 as the accounting year so that it agrees with the tax year end. It is possible to have a different year, but it then gets very complicated as self assessment is always the tax year, so complications like profit apportionments, overlap reliefs, etc come into play which is really making things over-complicated usually for no good reason.

debbie42

I registered as self employed in January, but my accountant has suggested that I start my accounting year in line with the tax year because it's easier. Shorter answer, but just agreeing with Pennywise

yelf

Pennywise wrote: »

It's tax years that matter - 6/4 to 5/4 - SA returns are always for tax years, not accounts years, not anniversary of starting up, etc.

In Jan 2011, she has to pay tax on her profits from start to 5/4/10.

If over £1,000, she also has to make a payment on account of half on 31.1.11 and again on 31.7.11.

In Jan 2012, she pays tax due on profits made in year 6/4/10 to 5/4/11, less the two payments on account, and also another half towards 2011/12.

It's far simpler to adopt 5/4 as the accounting year so that it agrees with the tax year end. It is possible to have a different year, but it then gets very complicated as self assessment is always the tax year, so complications like profit apportionments, overlap reliefs, etc come into play which is really making things over-complicated usually for no good reason.

Ok, so on 31.01.2011 she has to pay tax on her profits from November 2009 until when?

heretolearn_2

Nov 2009 - 5 April 2010.