My brain is not working very well today so just wondered if anyone could help confirm that my thoughts are correct or give me some better guidance.
I have just got a new client (sole trader builder) who has a year end of 31st Jan, I am now in the process of putting together his 2016/2017 accounts, he carried out some of his own work for clients during the year as well as working as a subbie, no problems with this year as no subbie work was carried out between Feb and April.
However (just planning ahead) for 2017/2018 the year end is still Jan 31st but he has been working as a subbie for a large period and is likely to continue for the next few months, am I right in thinking that I still include all his gross income between 1st Feb 2017 and Jan 31st 2018 but that I actually claim back all the CIS tax deducted between 6th April 2017 and 5th April 2018, even though the Income between 1st Feb and 5th April will not show on the accounts until the following year.
Hope the above makes sense
I have thought about changing his tax year but not sure at this stage if this would actually be of benefit to the client.
Any help/advice would be much appreciated
-- Edited by Artois on Tuesday 16th of January 2018 07:13:07 PM
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
I really need to knuckle down and learn base periods. All my SA subbies are 6th April - 5th April.
Tax deducted should go on the tax return in the year it relates to. So tax deducted between 1st February 2017 and 5th April 2017 will go on the 16-17 tax return and tax deducted after that will go on the 17-18 return.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
I really need to knuckle down and learn base periods. All my SA subbies are 6th April - 5th April.
Tax deducted should go on the tax return in the year it relates to. So tax deducted between 1st February 2017 and 5th April 2017 will go on the 16-17 tax return and tax deducted after that will go on the 17-18 return.
Hi John
Thanks for the reply, yes all my subbies were 6th April to 5th April until now.
I thought this was the case but just wanted confirmation, cheers.
If it is not beneficial to change the accounting date (not sure yet as don't know what the overlap profits are or the accounts for 2017/18 will end up as) then I need to explain that he is going to receive tax relief on 2 months Income for 2018/2019 and try and get him not to spend it (Yea right wish me luck)
Cheers for your help
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Hi Joanne, hope the trauma you mentioned has turned out okay
Thanks for the link, I have read some of it in parts before and will continue to do so as it is very informative.
It was just as I said to John that I wanted to check that the CIS tax claimed back was for the actual tax year and not for the clients accounting period of which both yourself and John have confirmed.
Cheers
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Trauma ongoing but more stable (family member has complete kidney failure, out of absolutely nowhere, currently in intensive care) and looking a bit more positive than it was on Saturday.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
