Financial Year?

lovedayuk

Hi,

I am new to being self employed (sole trader non VAT), but could someone explain the difference between the tax year and financial year? I am going to be self employed from the 28th April 2014. When will I have to send in a tax return and also pay my taxes?

CLAPTON

lovedayuk wrote: »

Hi,

I am new to being self employed (sole trader non VAT), but could someone explain the difference between the tax year and financial year? I am going to be self employed from the 28th April 2014. When will I have to send in a tax return and also pay my taxes?

most SE people would , in these circumstances, have to submit a tax return and pay the tax & NI by end january 2016.

purdyoaten

lovedayuk wrote: »

Hi,

I am new to being self employed (sole trader non VAT), but could someone explain the difference between the tax year and financial year? I am going to be self employed from the 28th April 2014. When will I have to send in a tax return and also pay my taxes?

The business' financial year is the period of your accounting, the date to which your books are made up. You may choose to have a year ending on 30th June each year - your financial year would be 1st July to 30th June.

The tax year runs from 6th April to 5th April. For self-assessment you are NORMALLY required to return the information from your accounts which end during that tax year e.g. the annual accounts to 30th June 2012 would be returned in the 2012/13 return.

There are exceptions and basis periods are not for the beginner. Suffice to say that, as it is your first year of trading, you are required to include your income and expenditure for the period 28th April 2014 to 5th April 2015 on the 2014/15 Self Assessment return which must be submitted by 31st January 2016. Because it can be complicated, many choose a 5th April year end (or 31st March which HMRC, in practice, will recognise and treat as 5th April) but there is no necessity to do this. You could choose a 30th April 2015 year end, for example, as this will complete a full twelve months for your business.

Tax payments are complicated in the first year few years. The one good thing is that you will pay no tax whatsoever until 31st January 2016 - bit of a catch up after that though!