sole trader - missed 3 month HM registration deadline - help!

Equinut

Hi guys

I started my own sole trader business in May of last year - and in my ignorance, completely missed the requirement to register with HMRC within 3 months of starting up.

It's now tax deadline kind of time and I am wondering what to do. I obviously need to register with them in order to submit a self-assessment by April. If I register now, stating I started in May, is it likely they'll lump their £100 fine on me? Or should I try and be crafty and register as if I started 3 months ago? Obviously the risk with this is the national insurance hasn't been paid from May until then though. Can anyone help with a bit of advice?

Thanks!

wizzkid_3

Fess up! Pay the fine, they will find out in the end especially with the entries in your accounts if they decide to look at them at any time. You will just worry about it until they do find out if you don't. I know £100 is a lot when you just start out, it happened to me too, I am not unsympathetic, but 'they' are.

Pennywise

You don't have a self assessment tax return deadline to worry about. If you started your business in May 2006, it is in the tax year ended 5 April 2007, the tax return for which doesn't need to be submitted until January 2008.

You problem is your failure to notify within three months. There is no way around this unless you actually weren't selling anything at that time (i.e. if you were just buying goods/equipment for the first few months, you could say your business didn't start until your first sale if it was later). You can't lie as HMRC could ask to see your paperwork which would clearly show when you started as your invoices, bank statements etc are all dated.

Just fill in the form, accept you are late and pay the £100 fine if they send you the demand for it. Remember that if your earnings are small for the current tax year (under £4200 ish?) you can claim exception from paying the £2.10 per week class 2 NIC (called the stamp) and if you are exempt from this, they don't charge the fine either.