With businesses able to complete their tax returns up until January 31st, it’s sometimes easy to forget that the tax year you are submitting for ended on the previous April 5th. Knowing the exact start and end dates of each tax year will make it easier for you to record your income. Small businesses can make their accounts up to whatever date they chose. However, 31 March (or 5 April, for tax purposes these dates are generally interchangeable) is normally best. It avoids complications such as apportionment of profit and overlap profit which affect the tax calculation. Changing the accounting date from one year to the next creates further complications so unless there are good reasons it is best not to do this.
Self-employed accounts can be prepared on an “accruals” or “cash” basis. With accrual accounting, income and expenses are reported in the period when they occurred. With cash accounting, the relevant date is when the payment was made or received. So if you are using accrual accounting, any invoices raised before your year end need to be included even if they weren’t paid until after this date.
Your business accounts and self-assessment return should include only business income and expenses. Personal expenses should be left out of the accounts or at least reported on the return as disallowable expenses. By failing to register all your business’ earnings or including personal expenses, you leave yourself open to claims of tax evasion and potential fines. If you have any doubts over whether income is business or personal, then contact an accountant to help you differentiate between the two.
If your business is registered for VAT, then you’ll need to make sure this is deducted from all your reported income and expenses. Since VAT is different from income tax, this money must be reported on in a separate return. HMRC is quick to fine anyone who fails to account for VAT correctly, so using computing software that does the calculations for you could be the most prudent option.
With the paper deadline already passed, businesses submitting their 2014/2015 tax return must do so via the internet. You will need to register to submit the return online; for this, you will need your UTR or Unique Taxpayer Reference. If you have misplaced or forgotten this reference, then you need to get hold of HMRC so they can supply you with it. Unfortunately, this is not a simple case of phoning up their hotline and asking them to recite it to you. HMRC can only send the UTR out in the post, which will take at least a couple of working days. Apply for the UTR and register for online submissions as soon as possible, so you have plenty of time to complete your return.