Consultancy and which Tax year?

daverave7

Hi,

My main income is via PAYE and I have recently been undertaking consultancy work which will span more than one tax year. however, I will receive the consultancy payment when the work is complete.

When do I need to complete a self assessment tax returns? Can I split the work done over two tax years on an accruals basis? - even though the payment will be made in one tax year. Also, do I need to be registered as self employed to do this?

Many thanks in advance!

Pennywise

Yes and yes.

But it does depend on the timings and value of the work done as at the tax year end.

If this is your first s/e job and you start it just before the year end and havn't really done much work on it (certainly nothing of value to invoice), then maybe you could delay registering for SA until 6/4/13 and avoid the need for SA for y/e 5/4/13.

But if what you did up to 5/4/13 was significant and had a value, then the strict rules would apply and you'd need to split the income and register and submit SA for 5/4/13 year.

daverave7

Pennywise wrote: »

Yes and yes.

But it does depend on the timings and value of the work done as at the tax year end.

If this is your first s/e job and you start it just before the year end and havn't really done much work on it (certainly nothing of value to invoice), then maybe you could delay registering for SA until 6/4/13 and avoid the need for SA for y/e 5/4/13.

But if what you did up to 5/4/13 was significant and had a value, then the strict rules would apply and you'd need to split the income and register and submit SA for 5/4/13 year.

I estimated that 60 % of the work was done last tax year I.e up to 5/4/13, and the remainder will be done in the next few months. So I won't get paid until a few months time. It would be financially advantageous to myself if I could split the tax paid over the two tax years (12/13 and 13/14). Is there anything I'd need to complete right now?

daverave7

Bump.........

zygurat789

Yes you need to register as self employed and within 3 months of starting or you'll be fined.
When you register you need to give them YOUR year end date to which you will make up accounts annually, the first period may not be for a year and will usually be used on a pro rata basis to determine your profits from commencement to the first 5 April. Even if you register from 3 months ago the
pro rata will not give much in the way of profit to 5/4/13.
So you need to register quick from as early as possible without incurring a fine and render an invoice date prior to 5/4/13 ASAP. Best get it paid too.