Splitting taxable income between tax years.

iamsorrywhat

Hello.

I'm a freelancer (sole trader) and I've just filled in my tax return for 12/13 to see how much I will have to pay in January 2014.

In March of 2013 (tax year 12/13) I received a large chunk of income which has put me into a higher taxable rate.

I've noticed that if I declare this income in the 13/14 tax year, then it will save the amount of tax I will pay for 12/13. I have estimated that I will earn less in the 13/14 tax tear, so splitting the income between tax years will really help me.

My question is, is this allowed? I'm not hiding my income, I'm just splitting it between tax year to even out tax payments.

Any advice would be really appreciated.

Thank you.

jimmo

Taxable profits are determined on the “accruals basis” which really means that the question is when did you do the work as opposed to when were you paid.

So if you did the work in 2012/13 you are taxable on that for 2012/13.

If, however, you have been paid in advance and will do the work in 2013/14 it would be correct to declare the income for 2013/14.