Self Employed Newbie PROBLEM ***NEED HELP***

gareth9358

Hi people

i am in a sticky situation. I have recently registered as self employed. Unfortunatly i registered 1 month late, and was told i was to incure a £100 fine. I was told on this forum previously that it wasnt likely that i would actually recieve this fine. But i walked in the door today and there it was, a fine for £100 from the HM people.

I am absolutly gutted as i am registered as SE as i have just completed my degree in photography and am looking to go solo. I registered to get the ball rolling, so as you can imagine my income aint great AT ALL. so being told i have to throw away £100 is crippling. I may as well have lied on the phone and said i began work 1 month later than i did. My honesty has cost me greatly.

Now the letter says this, i quote:

you are liable to pay a penalty of £100 for failing to notify the inland rev that you had comenced SE within the first 3 months following the month in which your self emoployment commenced as specified in regulations

It is possible for you to be excluded from this penalty if you can show that your earnings were below the required figure for Small Earnings Exception (£4,635 for 2007/2008) thoughout the revelant period or, you can provide an acceptable reason for failing to notify the commencment of your SE within the specified time............

I am confused about the income section of the letter. Does this mean if provide that i did not earn £4635 in the month or does it mean on average over the year (obviously the year 07/08 hasnt finshed yet)
Or do i grovle to the !!!!!!!s? I dont know how flexible they are.
How would i proove income anyway? I did earn some money in that month prior to the 3 month limit, but it wasnt a lot.


Sorry for the long winded problem, but i would be so thankful for any help/advise on this issue.

Gareth

fengirl_2

The £4635 they refer to is your taxable profit for the year ending 5 April 2008. Of course, you won't now what this is until after 5 April when the penalty will be refunded to you once you have self assessed, should your taxable profit be below that figure. You dont have to prove your income - under slef assessment, you send in your return and it is accepted - unless HMRC decide to investigate you which they can up to a year later.
They are fairly inflexible on the matter of penalties and, as you no doubt know, ignorance of the law is no defence.

pchelpman

fengirl wrote: »

They are fairly inflexible on the matter of penalties

I have seen people be excused from paying this particular fine by pleading that they didn't realise ... fresh out of uni ... first job... no money ... did what you thought was right by telling them (even if you realise now you were a little late) and so on.

Try an appeal. You have nothing to lose.


PCH

Elaine_Wilson

Just to clarify on the "low earnings" getout.

The "relevant period" they mention runs from the date you started self employment to the date you registered.

The earnings are your net income after deduction of all allowable expenses. Don't forget capital allowances in this calculation.

You need to pro-rata the £4,635 for the relevant period and then compare it your net earnings in that period.

If you were one month late in registering then you would have been self employed for between four and five months on the date you registered. So the exempt limit will be between £1,545 and £1,931.