I’ve going to put my hands up and plead ignorance here, I registered as a sole trader in August 2020 reselling on eBay for profit. I got quickbooks, I kept all my invoices and receipts and made sure I was really on the ball straight out the gate made sure I’d done my research and wasn’t going to fall foul of anything. I’ve registered for self assessment, I have my UTR and activation and I was all set to go, I’ve done my taxes and expenses and have the cash and then some... I’m almost there. But would you be filing online for the 2019/2020 tax year in which I’d have earnt sweet f all? I wasn’t doing any business activity until August 2020 Am I actually 12 months ahead and should be filing in January 2022? in my defence this is my first time filing a tax return as I’ve always been employed and never needed to deal with it...
It sounds like yes you are a year early, having registered HMRC might be expecting you to file for 19/20 by 31 January 2021 so if you don't file you might get letters and fined. Others may have more experience but I'd give them a ring to see if they can confirm whether the year is still open, record that they have details of all your income (p60) and ask whether they can close the year for you. Or file a return for 19/20 with your p60 and any other income if it's not too complicated.
Thanks, that answered my follow on question also! I shall give them a ring tomorrow to check everything is in order and look forward to the Jan 2022 deadline I should expect to pay my 2020/2021 bill on that date along with a 50% payment on account for the 2021/2022 tax year and a further 50% on July 31st 2022... right?
Ha, yes I was going to mention that, often forgotten and can feel quite painful in cashflow terms for new filers, start earmarking cash a little and often and it won't be as bad after that initial hit. The exception would be if your 2020/21 bill was less than £1,000 in which case the payment on account isn't due. Don't forget to include Class 4 NIC in your calculations too, it's not just income tax. If you expect your income to reduce in the future you can elect to reduce payments on account, but HMRC would charge interest on underpayments if it transpires your payments on account should have been higher (e.g. you come to file your return and your reduced payments didn't meet your liability, HMRC will say you should have paid half your liability at each payment on account [up to 50% of the prior year's liability] and charge interest for the time it went unpaid).
Awesome, thanks for the help @enbydee you have saved me much confusion , I shall ring HMRC tomorrow and explain my screw up in registering this year and put this cash aside and add to it for when I’m supposed to!
Good luck, even more luck if you try the online chat - it's a busy time of year let alone covid. I have literally got a quicker response writing to them in the past. Good luck though Edit: once you do get hold of them though i've found them to be extremely nice and helpful.
Yeah I thought as much, I’m working from home tomorrow so maybe if I continue ringing I should get through in 12 hours... right? if not it’s a letter on horseback
You may do, there's no rhyme nor reason that I can see (other than deadline times). My OH was sat on the online chat over two days wanting to get her owed cash back, it toyed with her but never put her through. The phone may be a better choice, no idea what their setup is during lockdown. But yeah, you may get lucky
Well that was a weird experience, first few attempts got nowhere just an automated message saying it was too busy and call back Second attempt I got put in the queue spoke to what sounded like a very stressed out lady, repeated my NI number a few times, explained my issue and she basically said someone would call me back in a few days and hung up before I could protest... Third attempt got through again, spoke to a very firmly spoken lady, said because I had registered my self employment as August of last year that I would have a tax return sent out after the April tax year as expected but me registering wouldn't mean they would expect anything from me in January
Ah sorry yeah, I get to go through the agents line so it's usually picked up pretty quick. Glad you got it sorted and I was perhaps being overly cautious but it's nice to have confirmation. I'd write a note to myself (including date) and keep it in a file somewhere for the next three years; just so you have a record of why you didn't file in case they ever do ask for a return for 19/20.
Think they sound snowed under. If for some reason it doesn't get logged don't worry, I once got a penalty for not submitting a tax return but it was in a year I didn't need to. A quick letter got that sorted. I haven't actually found a way of doing that online which would be easier.
I was having to do tax returns to 'repay' child benefit. Well I decided the benefit wasn't worth the faff so cancelled it before last tax year. This year after completing mine I got a message saying please don't bother next year - when I was sure I would have to phone and pester to get of the list (which I probably will do anyway to be on the safe side).
I had to repay Child Benefit this year, too, 'cos I popped over the earnings threshold. Still have to claim it, though, 'cos it's the Child Benefit claim that's covering what would otherwise be a gap in my wife's NI contributions - she's the one claiming it, but the earnings limit is based on joint earnings.
My understanding is that the earnings limit (for the High Income Child Benefit Charge) is based on one of you, not the combined. If one of you pops your head above the parapet of 50k, boom headshot, you both stay nice and quite at 49k? not a shot...
Yeah, sounds right - but as she's a stay-at-home parent, our combined income is exactly equal to my income alone...
@DeadP1xels I heard on the radio as I was driving home that they wouldn't penalise people for missing the deadline this year (as @RedFlames has posted), so don't sweat!
Worth noting that its a sliding scale, 10% repayment per £1k over £50k so until your over £60k (or near enough) its still beneficial - just have to fill in the tax return form each year.
Indeed. Hence why the wife is claiming it and I get the joy of self assessment - although HMRC have given me a deadline of 1st May
