Self Assessment - money earned in the old tax year but paid in the new

sitesafe

(as in which tax return year should it be showed on)

Hi there

I would appreciate some advice - trying to work out my earnings for the tax year 11-12 - just wondered what happens when there is an overlap.

For example if money is earned on 1 april 2011 but not paid until the new tax year 6 april or onwards then would it be part of the old tax year earnings 11-12 or would it be part of the new tax year earnings 12-13?

Many thanks!!

notanewuser

sitesafe wrote: »

(as in which tax return year should it be showed on)

Hi there

I would appreciate some advice - trying to work out my earnings for the tax year 11-12 - just wondered what happens when there is an overlap.

For example if money is earned on 1 april 2011 but not paid until the new tax year 6 april or onwards then would it be part of the old tax year earnings 11-12 or would it be part of the new tax year earnings 12-13?

Many thanks!!

You account for money in when it is received.

sitesafe

notanewuser wrote: »

You account for money in when it is received.

Thank you very - so it would be in the new tax year even though earned in the previous tax year - very helpful to know as filling in my form today!

PlutoinCapricorn

I don't agree: look at the HMRC notes for this field. You declare for work done in the tax year - as by the time you come to submit, you will have been paid.

PlutoinCapricorn

HMRC's own notes for box 8

"It is the money due to you up to your end of year – whether or not you have actually been paid"

sitesafe

Oh dear.... I did look but couldn't find - it was all very confusing and thought I would be easier to get an answer here....if anyone knows the correct page\document etc it would be most appreciated...

PlutoinCapricorn wrote: »

I don't agree: look at the HMRC notes for this field. You declare for work done in the tax year - as by the time you come to submit, you will have been paid.

sitesafe

Thank you...will look

PlutoinCapricorn wrote: »

HMRC's own notes for box 8

"It is the money due to you up to your end of year – whether or not you have actually been paid"

PlutoinCapricorn

http://www.hmrc.gov.uk/worksheets/sa103s-notes.pdf

PlutoinCapricorn

I think that you can click on Help for each box when filing online?

Kynthia

Generally the HMRC expect you to report your finances on an accruals basis. There are conditions where they allow you to report on a cash basis but generally an accruals basis is better. For example when renting a property you can report on a cash basis if your income is under £15k, so check the HMRC site for details.

An accruals basis is an accounting concept whereby you report income as being due whenever you provide the goods or service that earn this income rather than when you invoice or when you receive the money. Also expenses are reported as being incurred when you actually received the goods or service rather than when you were billed or when you paid.

Cook_County

The UK has a mandatory receipts basis for employment income and an accruals basos for self-employment income.

The government is discussing changing the latter at some future stage to match accounting for VAT.