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TonyTax
TonyTax, Tax Consultant
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1. First year of doing a tax return. This is childminding

Resolved Question:

1. First year of doing a tax return. This is childminding business. Feeling pretty clueless:
FROM MY SA:
If your business started after 5 April 2013, enter the start date DD MM YYYY: 19/11/2013
7. If your business ceased after 5 April 2013 but before 6 April 2014, enter the final date of trading: Not Entered
8. Date your books or accounts start - the beginning of your accounting period: 19/11/2013
9. Date your books or accounts are made up to or the end of your accounting period - read page SEFN 3 of the notes if you have filled in the box 6 and 7: 05/04/2014
With regards ***** ***** accounting period, I have only worked out figures up until 05/04/2014, that's why I put that as accounting period, so's not to confuse the situation. Does it have to be a year from business start up (19/11/2013 - 19/11/2014)? I couldn't understand their explanation.
2 a. I had put on my return that I was getting income from land in Pakistan, but was little that year, so I didn't need to fill out the foreign section, so it said. There will be a lot more next year as some land has been sold - should I be declaring this somewhere - to some department of HMRC, paying some other tax ?
b. At what amount should I expect to start paying income tax on this foreign income and can I expect it to be exactly the same rate as my normal income tax?
3. Balance at start of period:
- Do I put the amount I have in my personal current acct, as that's the account I use as well.
- I got a £1000 start-up grant. Do I need to include this here therefore answer is £1000 or earlier as part of my income?
- Do I put nothing here?
4. I haven't made much money in that time and have obviously been using the money made. As I'm using money myself from the account - should I be saying these are drawings?! Find it difficult to understand 'drawings' as I don't have a dedicated business account.
That's it I think!
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
.

Take a look here on calculating your profit or loss.

1 Your first accounting period does not have to be a year long. It makes sense to draw up your accounts to 5 April each year as that coincides with the tax year.

2 a If you are not UK domiciled and the foreign income and gains are less than £2,000, you can choose to be taxed on the remittance basis of assessment whereby you only pay tax on UK source income and income and gains you bring to the UK from abroad. Take a look at RDR1 here, in particular Section 9. Where the foreign income and gains are £2,000 or more, then you have to elect remittance basis if you wish to use it.

2 b You would pay tax at the same rates of tax you pay on UK source income on your foreign land income but if you pay any tax on that foreign land income in Pakistan, you will be able to offset the tax against the UK tax liability on the same income under the terms of the UK/Pakistan double tax treaty..

3 Your bank balance does not need to be disclosed in your tax return. You don't need to do a balance sheet. The start up grant may be taxable and you should ask the organisation that paid it to you if it is as there are so many different types of business grant, some taxable, some not. If it is taxable, it should be included as other income on the self-employment pages.

4 The funds you draw are drawings but, as I said in 3 above, you don't have to do a balance sheet.

I hope this helps but let me know if you have any further questions.
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Customer: replied 2 years ago.

,

Can I get clarification on the below - I've always lived in UK, so remittance basis not relevant to me.

2 a.There will be a lot more next year as some land has been sold - should I be declaring this somewhere - to some department of HMRC, paying some other tax ?

Thanks.

Expert:  TonyTax replied 2 years ago.

When was the land sold? If it was sold after 5 April 2014 then the gain will need to be reported in your 2015 tax return and Capital Gains Tax paid on 31 January 2016. You will need to complete the CG pages SA108 /15 which have yet to be released. The 2013/14 pages are here and I'm sure the 2014/15 pages will be similar.

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Customer: replied 2 years ago.

It would be CG I can see. Thanks help, Tony.

Expert:  TonyTax replied 2 years ago.
Thanks.

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