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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5030
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have been operating my own business since april 1st

Resolved Question:

Hi.
I have been operating my own business since april 1st but am only just registering as ltd company in next days.
Can I deckare my annual earnings in the ltd company as everything I was paid between April 1st and end of tax year or can I only start from when I registered the ltd company and before that I am considered self employed?
Lou
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Thank you for your question. You can only declare income in the LTD company accounts from the time the company was incorporated and it started to trade. Earnings prior to that would be treated as income from self employment and you will have to declare these in your self assment tax return. I hope this is helpful and answers your question. If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 2 years ago.
So if I started trade in April but incorporated in oct, what happens ?
Expert:  taxadvisor.uk replied 2 years ago.
Thank you for your reply.The company was incorporated in Oct and it could not have traded before its date of incorporation.You started to trade in Apr and income for the period Apr to date of incorporation of company would be treated as income from self-employment. I hope this is helpful and answers your question.
Customer: replied 2 years ago.
Thanks are you able to tell me what tax I would owe as self employed if I earnt £42,000?
Expert:  taxadvisor.uk replied 2 years ago.
Thanks for your reply... did you have any business expenses to be offset against this income.Assuming there were no expenses, your tax and Class2/4 NI liability on this income would be as follows:Turnover 42,000Expenses 0Profit 42,000Personal allowance 10,600Taxable income 31,400Income tax£31,400 at 20% 6,280£0 at 40% 0Total tax £6,280Class 4 NIC(42,000-8,059) at 9% £3,055Class 2 NIC - £2.80pw £73Total Tax and NI payable 9,407 I hope this is helpful.If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it by Just Answer.
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Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes