Confusion re date books made up to

by **Kroy** on Wed Jan 18, 2012 9:21 pm

I'm self employed and I've always calculated my income and expenses for the 30th April, a year AGO from the current year.

ie the current tax year is 5th April 2010 to 5th April 2011, but income/expenses I declare will be for the 30th April 2009 to 30th April 2010.

This is because several years ago i had an accountant who did it that way for me. Since then I have done my own tax and simply carried on where she left off.

I called the tax office today with a minor query and mentioned these dates, and was told that my income/expenses had to be made up to 5th April 2011.

the strange thing is that I've mentioned this several times over the phone to tax advisers in the past and never had a query. I've also put the date clearly on each form every year that my books are made up to.

Further, the tax adviser I spoke to says they will have to adjust all the previous years and that I should get in touch with them once I've done my tax for this year to sort this out - this would be a major pain to have to do.

Is this adviser right or not, and what is the best thing to do here?

by **King_Maker** on Thu Jan 19, 2012 8:40 am

What you have been doing is correct (except it's 1 May to the following 30 April) . Whoever you spoke to at HMRC is wrong. There is no legal requirement to make up accounts to 5 April - 31 March is often used instead. Often, neither of those dates is the optimal one.

Except when a business starts and ceases, the relevant accounts are the ones ENDING in the year of assessment. Therefore, your accounts for the year ended 30 April 2010 are the relevant to the Tax Year 2010-11.

by **Kroy** on Thu Jan 19, 2012 6:04 pm

Thank you King Maker, for putting my mind at rest.

BTW I spoke to an accountant last night at http://www.justanswer.com who also confirmed that I was correct.

by **mullet** on Fri Jan 20, 2012 7:22 pm

Yes, you can choose any accounts date.

A general point. If someone is declaring "simple" property income (some people mistakenly believe that this makes them self employed) then they have to complete the land/property pages and use 5 April as the accounts date.

by **King_Maker** on Sun Jan 22, 2012 1:43 pm

mullet wrote:Yes, you can choose any accounts date.

A general point. If someone is declaring "simple" property income (some people mistakenly believe that this makes them self employed) then they have to complete the land/property pages and use 5 April as the accounts date.

Not sure what you mean by "simple" property income.

But there is no need to use a 5 April year end even for a property rental basis - although the BASIS period has to be 5 April. However, it may well be simpler and more convenient to use 5 April.

by **mullet** on Sun Jan 22, 2012 2:59 pm

By "simple" property income I meant as distinct from service accommodation ... which would probably amount to a trade. And yes, in strictness I should have said basis period 5 April rather than accounting period. But it would be unnecessarily burdensome to pick an accounts date other than 5 April for property income.

by **King_Maker** on Sun Jan 22, 2012 4:13 pm

mullet wrote:By "simple" property income I meant as distinct from service accommodation ... which would probably amount to a trade. And yes, in strictness I should have said basis period 5 April rather than accounting period. But it would be unnecessarily burdensome to pick an accounts date other than 5 April for property income.

mullett, I now understand what you were getting at. A trade would be treated differently.

I would only be recommending a different date to 5 April where the tax saving would be significant.