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Accountants in Preston

Income Tax and Self Assessment for Self-Employed People

We want to make tax filing as simple as possible, and do recommend that you start the accounts and tax process in good time.

We also believe that your Accounts should be prepared for your own benefit, and we will help you understand them, if you ask us to.

Tax is frequently the only reason why businesses prepare their accounts.  As a result it can be quite stressful and gets low priority.  However, delays can be costly.


Registering your buiness with HMRC

If you have just started in business as a sole trader, and have not registered with HMRC, you can download form CWF1 from this link:

When do I need to file Accounts?

If you have not registered as a Limited Company, you are regarded as Self-Employed by HMRC.

You will be taxed under the Income Tax rules.
Income Tax is assessed in "Tax Years", which run from 6th April to 5th April the following year.
For example the tax year 2011/12 runs from 6th April 2011 to 5th April 2012.

Your Accounts must be filed, in paper form by 31st October, or online by the 31st January.

For example, if you chose your year end to be 30th September (and it is your choice) then the 30th September 2011 falls in the tax year 2011/12, because it is between 6th April 2011 and 5th April 2012.  Therefore, in this example, your Accounts to your year end 30th September 2011 must be filed online by 31st January 2013 - quite a long time later.

By 31st January 2013, your Accounts will be useful for HMRC, but little use to you because it relates to 20 months ago!  This is why it's not a good idea to put it off, because your financial results are important for you to understand.

When do I need to pay my Income Tax under Self Assessment?

Once a business is into its second year, payments on account are collected in the January (of the 6th April to following 5th April tax year) and then the following July.

Payments on account are only estimates and are collected in two equal instalments on the 31st January of the 'Year of Assessment', and the following 31st July.  Any balance of tax still owing has to be paid by the following 31st January.

For example, for the 2011/12 Year of Assessment (Accounting Year ending between 6th April 2011 and 5th April 2012) the instalments on account dates are 31st January 2012 and 31st July 2012.  Any outstanding balance must be paid by 31 January 2013.  In this example, interest is payable on tax unpaid by 31st January 2013, and possibly fines.

Just Started ?

For new businesses, the HMRC use "Opening Year Rules" to calculate the tax due.  These can be quite complicated, depending on how long a period is covered by your first set of Accounts.  If your first Accounts period is 12 months, then you have a nice and neat "basis period", which will make the calculations easier.  If your first Accounts period is not 12 months, then it is a little more complicated!

If you have just started up in business, the HMRC webpages Starting up in Business and How to calculate your taxable profits may be useful for you.

Our Services

We can save you the time and the hassle.

We will prepare your Income or Corporation Tax calculations and submit them to HMRC.

We will also support your own online filing and self assessment.

Our tax services also include:

  • VAT

  • PAYE / Payroll

  • P11D

  • CIS


Tax Investigations

Tax investigations can be very stressful.  We recommend that you get expert advice and we will be able to provide the necessary expertise.