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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5143
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
Type Your Tax Question Here... is online now

I just started online business this year around May. I got

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Hello! I just started online business this year around May. I got some profit now, but I want to know what should I do with the tax. Do I need to pay tax on my online sales profit for the last 4 months? I just have one private bank account and I already spend my income from the online sales. I am going to register a new account and also register as soletrader. I know I need to pay tax in the future, from my solrtrader registered. Just don't know do I need to pay tax on my previous online sales? Thank you a lot!!!!

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.

Thank you for your question.

Please clarify for me... did you start your businessaround May 2016?

You should register for self assessment as a sole trader if you have not already done so.

You say and I quote "Just don't know do I need to pay tax on my previous online sales? What online sales are you referring tohere?

Many thanks

Customer: replied 1 year ago.
Sorry I didn't explained myself clearly. Actually I got a limited company registered. But since I don't know how to do the business stuff back to May this year where I just started selling online. I didn't separate my sales incomes and my personal use for the last 4 months (I already spent my online sale income). But now I read the rules from the carefully, and I think that I can't pay tax for the last 4 months online sale under the name of my limited company. Because I already spend some of the money earned from the last 4 months' online sale. That is what I am worry about.

Thank you for your reply.

If you started business in May 2016 and for the first 4/5months you did not have a business bank account and all online sales income went into your personal bank account, you should not worry about it.

You should identify what was business income and prepare a statement of income and expenses for this period and report it as your sole trader income when you file your tax return for year ending 5 Apr 2017.

You would most probably also have salary from your LTD company in the current year to report in your next tax return.

You should disclose the income from self-employment even though you have spent it most of it. You can’t include that income as part of your LTD company income as the company was not in existence then.

My advice to you is to disclose that income separately.

If you need any help with preparing the accounts for that period, please come back and I will help you here.

I hope this is helpful and answers your question.

If you have any other questions, please ask mebefore you rate my service – I’ll be happy to respond.

Customer: replied 1 year ago.
Thank you so much! Your answer really help me a lot! I do need you to help me with the accounts for that period. Just wondering how to do so? Thank you!

Thank you for your reply and your good words..

I am pleased you found my answer 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.

Once you have collated information on your internet trading prior to formation of LTD Company, send me a a new question here and request that I answer it for you.

Many thanks and other Tax Specialists are ready to help you

I thank you for accepting my answer.

Your reward of a generous bonus is greatly appreciated.

Best wishes.