Q: I have been self-employed since May 2010; do I need to do my tax return at the end of April this year or can i do it later?
Jan 10 2011
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If you start as a sole trader (an unincorporated business) you are taxed (income tax) on the profits you earn. You must notify HM Revenue & Customs within three months of starting the business. Information on registering for self-employment is available on the HM Revenue & Customs website.
You will then have to complete the 'Self Employment' section of your annual Tax Return after the end of the tax year (5th April). As you started in May 2010 your first return will be for the period up to 5 April 2011 (tax year 2010/11). However many self-employed businesses chose to end their accounts at the end of a month and March 31 is a popular choice. You will need to prepare a set of accounts to complete the Self Employment Tax Return. The Tax Return can be filed on line until January 31 2012 but if you want to file a paper return it has to be done by October 31 2011.
Yes, you must include all transactions since the start of the business. This may include any pre-start up costs of assets you bring into the business such as a motor car or van, IT equipment, programmes, etc at cost or valuation (at the commencement of the business). You can also claim for a proportion of the costs of the location you are trading from as an expense. If you are based at home the costs of the room acting as your office would be the basis of a claim. You must keep records to justify any costs you charge against your sales, in case H M Revenue & Customs enquire about them. There is more advice on record-keeping, etc on the HMRC website mentioned above.
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