Tax help needed please

Almo

Hello,

This seemed the most appropriate board to post this on, so I hope it's ok.

I have recently started working over the internet as a second job and am self employed in this job, but PAYE in my day job. As I'm emigrating shortly I want to get ahead of the game and fill in my tax return now so it's one less thing to worry about.

My query is this: I earn money almost daily from my self employed job, and get paid by the company on a monthly basis. So, on April 5 I was paid for all the work I did in March, but not early April. Does the money I earned from 1 - 5 April get included in the 06/07 tax calculations, or 07/08? I have earned the money effectively, but it won't get paid until early May.

Hope that made sense. I would be very grateful for any help

fguk

I dont want to advise you wrongly, and I am no expert but....

I think the tax year ended on the 5th April, so I would declare the earnings in this years return, even without getting the payment.

You would pay the tax on it in the end, and unless you are really lucky, a weeks earnings wont make that much difference to this years tax bill!

Happy to be proved wrong on this!

Raksha

You should get a P60 from the PAYE company before the end of May which will detail your total earnings for Y/E 2007.

the_optimist

I'm wondering about the same thing, as I vaguely remember, that invoices sent out before 5th April count towards that tax year even if you get paid after 6th April. This is the first year it applies to me and I'm stuck at the moment. Hope somebody knows!

martindow

I would phone the tax helpline or contact your local office - you will find that they are very helpful. As Raksha says your employer should provide you with 2006/2007 figures to use for the PAYE job.

Raksha

IIRC it doesn't matter which year you account for the incoming money, so long as you are consistant - ie, you can't account for the one job in 2006 because that was when you did it, and the same job in 2007 because that was when you received the money. I account for all my work the date I did the job (and raised the invoice) because it suits me that way.

WHA

Tax law requires you to declare business profits in the tax year they are earned, not the tax year you are paid. You bring in monies owed to you at the year end, just remember to adjust for it next year or it would be taxed twice if you take your income and add again the year end monies owed. There is no option, you can't adopt the "date of receipt" basis instead, although if you did, HMRC are unlikely to cause too much fuss if the figures are small.