My sole trader accounts run to the 31st July each year. Why did my accountant use the 07/08 tax bands...?
when calculating my 06/07 accounts which ended 31.07.07 and were submitted before 31.01.08? Does this mean I have to use the 08/09 guidlines when calculating my accounts for 07/08?
United Kingdom - 3 Answers
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Answer 1 :
Hi I am from TaxAssist Accountants. We have to declare your income and expenditure during the tax year by 31st January of the following year. This always runs to the 5th April regardless of when your company was formed. Your accountant will use the new guidelines from this date. You can still use the guidelines for 07/08 until you file your return which needs to be submitted now really.
Answer 2 :
Your accounts ending within the tax year form the basis for the asessment. So 31/07/07 (within 2007/08) is returned for 2007/08.
Answer 3 :
Tax years run from April 6th to April 5th the following year. When you are a sole trader you are free to make up your annual accounts on any date you choose - in your case it is 31st July. For any given tax year you pay tax on the profits of your trading year that ends in that tax year. 31-7-07 is in the tax year 07/08 (6th April 07 to 5th April 08). So your self-employment tax for 07/08 is based on your profits in your personal trading year 1st August 06 to 31st July 07. The final deadline for submitting your tax return for 07/08 is this January 31st. Your accountant could not have submitted your 07/08 return before Jan 08 because that tax year had not ended then. So when you come to submit your return for tax year 08/09 you will be assessed on your profits for your year 07/08 etc. It is better to think of it in terms of "which set of accounts do I use for tax year XXXX" rather than "which tax rules do I use for my year ZZZZ". This is because your year is specific to you. The tax year is used by everyone.
