?When Does Self-Employment Begin

[Mikethebook]

I am a British Citizen who returned to this country in July 2008 since when I have been spending most of my time writing and rewriting a children's novel which I hope eventually to have published and thereafter further books. Expenses have been involved in getting it edited and reviewed by professionals amongst other things but so far no income has been produced. For immigration purposes re my American wife it would be helpful to prove that I have been involved in "business activity" since I returned to the UK e.g. through tax assessments but:

1. Given there is no income can I actually register as self-employed or do I need to wait until I have a publisher?
2. If so, could I register back to July 2008? Yes, I know late registration involves a £100 penalty but would this be the case is there is no income arising?
Any thoughts would be much appreciated.

[pawncob]

You can register as self employed at any time, but your business doesn't start until you actually make a sale.
The £100 penalty is fixed. You can't avoid it. Why would you want to register in 2008? There are no benefits.
See:
http://www.hmrc.gov.uk/manuals/bimmanual/BIM50700.htm

[Incredulum]

You can register as self employed at any time, but your business doesn't start until you actually make a sale.

I disagree. Your trade starts when you have a product that is ready to sell and try to sell it; there is no need actually to sell it.

http://www.hmrc.gov.uk/MANUALS/bimmanual/bim70510.htm

So I suggest it commences on the date that you start touting your book/idea/whatever around agents/publishers. The date on which you first feel you have something that would be saleable and try to sell it.

The £100 penalty is fixed. You can't avoid it. Why would you want to register in 2008? There are no benefits.

He states the benefit is in his wife's immigration. Personally, as there is no tax riding on when you do commence, I don't see any problem in registering back dated to 2008. They can only refuse to accept your registration which will save you £100, and they're not going to. Whether it makes a difference with the immigration authorities I do not know.

[Mikethebook]

Thanks to both of you. It's a confusing issue.

[Ben Laws]

Well,

I agree with Incredulum and would expand further to point out the fact that you can claim three previous years worth of pre trading expenses (if any) and also that if you register back to 2008 you would most certainly have made a loss to put in your 08/09 return (as there was no income but there was expenses).

I have dealt with a number of seriously delayed self emploment regsistrations and have never seen the £100.00 late registration fee come into force. But then I usually file the CWF1 registration form via post withany tax returns to ensure the client is upto date before they can ask for the information alongside agent authorisation and a reallysweet letter and (if any tax is due) a cheque.

Now, us Practitioners know that HMRC hate registrations,letters, returns and payments coming in the same envelope (as each item needs to be sent to the "relevant departments" ie "those that can read CWF1" "those that can process returns" "those that can read letters" and "those what know what a cheque is") but its amazing how quick a UTR is processed and returns are filed when they are desperate to allocate a payment against something - works every time!

Re; your wife. The home office often ask partners about their income so backdated registration may give the appearance that you "were doing something constructive and are settled" during that time, but dont count on that alone. They may wish to confirm your financial stability.

Regards


Ben Laws
Partner
Pearson Laws LLP

[Mikethebook]

Thanks. That's very helpful.

[Ben Laws]

No Problem.