Advice Please on Self Employment Start Date

SoFedUpOfBeingRippedOff

Good morning,

I am helping my son with his first self assessment tax return for 2018-19. With help from New Enterprise Allowance scheme he registered with HMRC as starting a business in September 2018.

However, on checking his income/accounts, it appears he had some business income from related activities going back to May 2018 and that he made a small amount of income (under the £1000 trading allowance) in the previous tax year while he was a full time student with no other income.

Therefore I am proposing that he either changes his business start date to 06/04/18 (start of that tax year) for the purposes of NI and/or leaves it blank in tax return as he could have been considered to be trading in the previous tax year under the £1000 allowance for which it is my understanding that you don't have to register with HMRC unless specific conditions apply (which they didn't).

We don't want to get on the wrong side of HMRC and all income is being accounted for so I'm just wondering if anyone can advise whether this is an acceptable course of action. Thoughts please? Thanks in advance.

00ec25

April 17 - April 18
income <£1,000 therefore does not need to be declared on a tax return (even if doing a return for other reasons)

read 2nd paragraph
https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

SoFedUpOfBeingRippedOff

00ec25 wrote: »

April 17 - April 18
income <£1,000 therefore does not need to be declared on a tax return (even if doing a return for other reasons)

read 2nd paragraph

Thanks, appreciate your response, but I know this - I want to know about April 18 - April 19 and in particular what to use as the business start date and whether it is a problem to change it if it has been registered wrongly.

tebthereb

Have a look at the notes to the self-employment pages:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/787406/sa103s_notes_2019.pdf

To me they read as saying you only enter a start date or cessation date in the 2018/19 return if the business started or ceased in that year. It seems like you are saying it started in a prior year. Therefore I would not include a start date.

I would be inclined to make some disclosure in the additional information (“white space”) field to explain that the self-employment started in a prior year but was not reportable as within the trading allowance.

The return will then be correct.

I have no idea whether it’s an issue that your son had income prior to registering under the NEA scheme as I don’t know enough about that scheme and the qualifying criteria. I don’t think any NEA received is reportable on the tax return.

SoFedUpOfBeingRippedOff

Thank you tebthereb, I agree with you, the only problem being that when he registered with HMRC, he has stated the business start date as September 2018 and it looks like the National Insurance due corresponds to this date. It looks like we might be able to update this, otherwise I suppose we will have to get in touch with HMRC and ask them if they can do it. Thanks again.