This question cropped up today during our discussion.
I was of the opinion that “within 3 months” of start of business one should inform HMRC by registering as a self-employed.
I was challenged on this and informed that latest guidance stated that one can register within 6 months after the end of financial year.
I came home and checked guidance is :
“Register as soon as you can after starting your business. At the latest, you should register by 5 October in your business’s second tax year.
If you start working as a sole trader between April 2014 to March 2015, you should register before 5 October 2015.
If you register later than this, you won’t get a penalty as long as you send your Self-Assessment tax return and pay your bill on time.”
I think HMRC means by the bill both Income Tax and both Class 4 and 2 National Insurance contributions.
But as informed by one of the discussion member, he recently registered an individual in Oct 2015 and mentioned that the individual started work in Jan 2015 but was asked to pay Class 2 NI for last 2 months only.
It seems HMRC’s internal computer systems are using the old guidance of 3 months, whereas the guidance to public has changed.
There are too many accounting framework around IFRS, IFRS for SMEs, FRSSE, FRS 102 and others, all creating a confusing mess.
I have listed below a simply the applicable frameworks:
|Micro company ie. Turnover below £632,000 per annum1
|Small Companies ie. Turnover below £10.20 million per annum1
||Section 1A Small Entities of FRS 102
Where an entity prepares its financial statements in accordance with an accounting framework , a statement of compliance needs to be included in the notes.
- Other criteria also apply like number of employees and balance sheet total.
- Visit FRC website and search for financial reporting framework.
Recently one of my customer was having issue in submission of corporation tax return.
The return status was showing as `Locked`. Finally we found out the client password was 13 digits long but HMRC website will take in only the first 12 digits of the password.
Leaving the 13th character of the password , did the trick !
HMRC guidance states that this can be done via online service but I could not find an option to do it.
Finally on calling them they informed that I need to send a letter to:
Corporation Tax Services,
Sample letter below:
Corporation Tax Services,
10th Jan 2017
Sub: Company now Active
Unique Taxpayer Reference (UTR): 6666 6666 66
Company Name: THE ABC LTD
Company Number: 09000000
Please make the above mentioned company ACTIVE in your records. The company started trading from 5th Oct 2015.
Please can we request you to make the following accounting period live to enable us to file the tax return:
Period: 1st Oct 2015 to 30th September 2016.
In case you have any questions, please do not hesitate to contact us. We are their HMRC Agent. Our Corporation Tax Agent Reference is: H2102A
Often this question crops up in business discussions about how to value a business.
Every industry has its own way of valuing. Actual valuation is ultimately a matter of negotiation but some bench mark is needed as a guide post for both parties to start negotiations.
Like in our own accounting business : value is usually 110% of the annual revenues.
I came across a gem during my recent studies, have a look via link below:
This gives a basic rule of thumb used in valuing different businesses.