OT Tax Code and Accounting Periods

nxdmsandkaskdjaqd

Hi

No the business has not ceased, it's still trading but with a reduced revenue stream.

purdyoaten

nxdmsandkaskdjaqd wrote: »

Hi

No the business has not ceased, it's still trading but with a reduced revenue stream.

That, actually may be one good reason to change the year end (if the profit is significantly less than the previous year)

When did the business commence?

nxdmsandkaskdjaqd

purdyoaten wrote: »

That, actually may be one good reason to change the year end (if the profit is significantly less than the previous year)

When did the business commence?

Approx 2004, so some 10 years ago

zygurat789

nxdmsandkaskdjaqd wrote: »

Is your reply in the above in relation to the drawing that I done? If so, I am unable to see how you account for your Employment Income running April To April with your Business Income running Jan to Dec. And how do you deal with this in your tax return.

Your drawing has made the thread unwieldy and I cannot follow it.
Income from different sources is treated in different ways by HMRC. I have explained how self employed income is dealt with, PAYE is on an actual basis ie income from 6 April 2014 to 5 April 2015 is assessed as 2014/15.
Yes the two different types of income assessed in the samne tax year arise in different time periods.

zygurat789

nxdmsandkaskdjaqd wrote: »

Approx 2004, so some 10 years ago

Do you have the overlap profits?

nxdmsandkaskdjaqd

zygurat789 wrote: »

Do you have the overlap profits?

Sorry, but I am not aware of declaring any Overlap Profits!!

purdyoaten

You have two options.

1) Change the year end to 31st March. If this means that the accounting year to 31st December 2014 is extended to 31st March 2015 the profits for this whole accounting period (1/12/14 - 31/3/15) will need to be declared on the 2104/15 return. If you have no overlap period, this will obviously increase the profit and tax payable for 2014/15.

2) Leave well alone (my advice) and declare the accounts for the year ended 31st December 2014 on the 2014/15 return along with the employment income for the tax year 2014/15.

nxdmsandkaskdjaqd

purdyoaten wrote: »

2) Leave well alone (my advice) and declare the accounts for the year ended 31st December 2014 on the 2014/15 return along with the employment income for the tax year 2014/15.

Thank you for this. I have just been reading back through this thread and noticed something which I initial didn't take on board to do with HMRC accounting periods.

The business income for the calendar year 2014 was submitted to HMRC in the Jan of 2015!!!!! This has been done the same way every year for the last 10 years. This is now obviously an error. How does this work out now?

zygurat789

nxdmsandkaskdjaqd wrote: »

Sorry, but I am not aware of declaring any Overlap Profits!!

When your son first started his first assessment of taxable profits should have been date of commencement to 5 April. His second assessment should have been date of commencement to 1 year after. So 1/1/04 - 5/4/04 and 1/1/04 - 31/12/04.
You can see some profits have been taxed twice, these are overlap profits and are deducted accoring to time periods on either a change of accounting date or cessation. So you see that this figure will be required at some future date and it will be good news.

zygurat789

nxdmsandkaskdjaqd wrote: »

Thank you for this. I have just been reading back through this thread and noticed something which I initial didn't take on board to do with HMRC accounting periods.

The business income for the calendar year 2014 was submitted to HMRC in the Jan of 2015!!!!! This has been done the same way every year for the last 10 years. This is now obviously an error. How does this work out now?

I have never had to deal with that situation so I can't comment.