Registering for self assessment confusion....

VintageBelle

Hi.
I am hoping someone can shed some light on my query.
I started a new business earlier in the year. I've gone on to register as a sole trader but it says "The trading allowance was introduced from 6 April 2017. If you have annual gross income from self-employment of £1,000 or less then you may not need to register your self-employment for that year."
I didn't make more than £1k in the 19-20 tax year, but now I am confused about setting up. Obviously I am hoping this year to make sales well exceeding £1k which of course I will register for, but I am confused now how to reflect this all in my books when I do register. Do I class the business start date from 06/04/20? I'm just really confused, it's thrown me. I'm probably totally over complicating things now and the answer is probably really simple but things like this totally stress me out.
Any guidance that can be offered will be really really appreciated.
Many thanks

Anna

oldbikebloke

your confusion may stem from the fact you do not "register" a business, you register for a tax return

the rules about tax returns are clear, you are required to register for a tax return if you have self employment income upon which you will have to pay tax 
For 19/20 your gross income is less than £1,000 so you do not need to register for a tax return as you have no tax to pay 

that has nothing whatsoever to do with the date you started trading, which obviously was not 6/4/20.

During 20/21 tax year you do not yet have any idea whether your income will be >£1,000, so don't rush to register for a tax return if you may not need to. That is why the deadline for registering "self employment", in other words admitting that you have untaxed income in excess of the allowance is the 5th October following the end of the tax year in which you had that situation. So for 20/21 tax year you have until 5/10/21 to register for a tax return, which will then need to be submitted by 31 Jan 22 at the absolute latest - assuming of course you need to do a tax return for 20/21 in the first place...

HMRC have given these allowances to reduce the number of people who send tax returns for piddling sums of money. It is more cost effective for HMRC to forgo such tax, than to process tax returns from people with income <£1k hence you do not register for a tax return in such a scenario

VintageBelle

oldbikebloke said:

your confusion may stem from the fact you do not "register" a business, you register for a tax return

the rules about tax returns are clear, you are required to register for a tax return if you have self employment income upon which you will have to pay tax 
For 19/20 your gross income is less than £1,000 so you do not need to register for a tax return as you have no tax to pay 

that has nothing whatsoever to do with the date you started trading, which obviously was not 6/4/20.

During 20/21 tax year you do not yet have any idea whether your income will be >£1,000, so don't rush to register for a tax return if you may not need to. That is why the deadline for registering "self employment", in other words admitting that you have untaxed income in excess of the allowance is the 5th October following the end of the tax year in which you had that situation. So for 20/21 tax year you have until 5/10/21 to register for a tax return, which will then need to be submitted by 31 Jan 22 at the absolute latest - assuming of course you need to do a tax return for 20/21 in the first place...

HMRC have given these allowances to reduce the number of people who send tax returns for piddling sums of money. It is more cost effective for HMRC to forgo such tax, than to process tax returns from people with income <£1k hence you do not register for a tax return in such a scenario

Thank you, that's really appreciated.
Many thanks