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TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 17610
Experience:  International tax
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Just browsing, really - but that is because I do have a

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Just browsing, really - but that is because I do have a decision to make
I'm retired, in receipt of state pension from both UK and Danish authorities (have lived in the UK since 1978) and a couple of small pensions and annuities.
Assistant: Thank you. Can you provide any more details to help us find you the right Expert?
Customer: Now doing a bit of consulting but have not registered with HMRC as self-employed and assume I must


As a sole trader you need to register for Self Assessment. You should register as soon as you can after starting your business. At the latest, you should register by 5 October in your business’s second tax year.

ell HM Revenue and Customs (HMRC) you want to be a sole trader by registering as a new business. You’ll register for Self Assessment tax returns and Class 2 National Insurance at the same time.

You’ll then be able to report your self-employment income through a tax return after the end of each tax year.

Customer: replied 1 year ago.
I own a dormant limited company (which *never* traded) but assume that for the small amounts of income concerned (for my current contract £16,000 across two tax years) there is no benefit in activating it.

I would not think that you could benefit from activating it.

Customer: replied 1 year ago.
My client is reimbursing major expenses such as flights and hotels but I discharge minor ones such as UK travel. The reimbursements will total £5,000 across two years.
How should I keep a record a my expenses? Just a categorized Excel sheet?

An excel sheet would be useful. If you are using your own vehicle, you can claim allowable business expenses for:

  • vehicle insurance
  • repairs and servicing
  • fuel
  • parking
  • hire charges
  • vehicle licence fees
  • breakdown cover
  • train, bus, air and taxi fares
  • hotel rooms
  • meals on overnight business trips
Customer: replied 1 year ago.
How about phone bills and a proportion of broadband provision?
Customer: replied 1 year ago.
Back to the Excel sheet: One just tots up total expenses and in annual tax return deducts them from earnings? There are no accounts as such?

They may be. As long as it is a required expense to run your business activity.

Here is a short list

The cost needs to be directly required to earn the income.

You will report the expenses and they are deducted from your total received.

Customer: replied 1 year ago.
on the "Annual Accounts" format? Very informal, I assume?
Customer: replied 1 year ago.
I.e. just a spreadsheet as mentioned?

The spread sheet is fine but you should retain any receipts that prove your amounts too.

You don’t need to send your records in when you submit your tax return but you need to keep them so you can:

  • work out your profit or loss for your tax return
  • show them to HM Revenue and Customs (HMRC) if asked

You must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year.

Customer: replied 1 year ago.
I have not reported income received in March 2016 but assume I will do so next January?
And subsequent 2016 income in January 2018?

Midnight 31 January 2017 if you file Online.

You need to register by the October date.

Customer: replied 1 year ago.
You mention fuel and car service/insurance above as allowable expenses. I assume mileage at the HMRC rates could take the place of that?

You could use the simplified expenses and use mileage. Keep a log of the actual miles.

I sincerely ***** ***** has been useful.

If you rate in a positive way (look for the STARS or SMILEY FACES) I am credited with responding. It adds nothing to your costs but it assists me.

Customer: replied 1 year ago.
On tax returns: I would of course like to spread income over two years to maximise effect of tax free allowances. Am I right to think pre-Apr 5 2016 income goes on this year's return?Then how about fees earned after April?
Customer: replied 1 year ago.
Those are my questions for now. I will rate on your reply and log out. Thank you very much.
Customer: replied 1 year ago.
You still there?

Most small businesses with an income of £83,000 or less can use cash basisreporting.

With this method, you only record income or expenses when you receive money or pay a bill. This means you won’t need to pay Income Tax on money you haven’t yet received in your accounting period.

EXAMPLE: You invoiced someone on 15 March 2016 but didn’t receive the money until 30 April 2016. Record this income for the 2016 to 2017 tax year.

If you used the traditional method you pay tax in the year invoiced even if you did not receive the payment util the next year (After the tax year closed in April).

Yes, I was typing.

Customer: replied 1 year ago.
Sorry, not usually impatient...
...But them how do I realize benefit of spreading income over two years?

You have to receive your payments in the year you want to pay tax. You cannot spread it to another year out side the accounting rules.

Customer: replied 1 year ago.
In your example, say £8,000 invoiced in Feb-Mar
...and £8,000 in May-Dec?
Customer: replied 1 year ago.
All £16K taxable in 2016-17, against only one set of tax free allowances?

Pay would need to be after April if you wanted it in 2016-2017 year. That goes for both.

If all paid in same year then yes if you are not using traditional.

If you use traditional accounting then you use the invoice dates. You can see 2 years then and spread.

It comes down to your accounting.

TaxRobin and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
OK, that's kind of clear... Main thing now is to register with HMRC.
Thank you

You are most welcome.