I am Debbie Story, a partner at Sleigh & Story, a local firm of qualified accountants. In this monthly feature I want to help local people and businesses by giving clear and simple explanations to tax and accountancy questions. In this first Q&A feature I will start by going ‘Back to Basics’.
Q: When do I need to file my tax return? Is it 31 October or 31 January?
A: It depends on whether you complete a paper or electronic self-assessment tax return. If you complete the paper version, the return is due by 31 October 2011, for the tax year ended 5 April 2011. If your return is submitted electronically, then it is due by 31 January 2012.
Q: Who do I contact when I start trading?
A: I strongly recommend speaking to an accountant first to make sure you start trading under the correct structure e.g. self employed, limited company. Most accountants do not charge for the first meeting.
To register as self-employed, call HM Revenue & Customs (HMRC) on 0845 9154515.
Q: When do I have to register for VAT?
A: When your sales in the last 12 months reach £73,000, or you expect to go over that figure in the next 30 days alone. It is a rolling 12 months, so you need to review your sales on a monthly basis, not just at your year end.
Q: How long do I need to keep my records for?
A: As a general rule, you should keep your records for a minimum of six years (in addition to your current year). Therefore in this tax year 2011/12 you should be keeping a minimum of everything since 6 April 2005.
Q: How much can I earn without being a higher rate tax payer?
A: Most people under 65 will pay tax at the higher rate of 40% when their taxable income reaches £42,475.
Please email your questions to debbie@sleighandstory.co.uk or call me on 01484 723783. I will answer your questions promptly and, with your permission, share the example in future articles.
Kind regards
Debbie
The information contained in this article is of a general nature and you are advised to obtain specific professional advice before you take any action.
