self employed Earnings

[wazee89]

From April 2011 to April 2012, my net income was (say £10,000) as a sole trader.

My profits from January 2012 to April 2012 were £15,000 but due to more earlier expenditures and loans, it reduced to £10,000.

When i ll apply for my extension this december, i have to send the proof of my tax paid to HM Revenue (which would be on £10,000).

Because i have to include two accounts from January 2012 to April 2012. and April 2012 to December 2012.

Question is, can i claim £15,000 profits from Jan12 to April12 (even though i ll pay tax on £10,000 profits made in full year from Apr11 to Apr12)?
or should i divide £10,000 by 12 and then only claim 3 months profits?

advice needed from members and moderators.

Regards

[wazee89]

anyone?

[AccountantMatthew]

You will be claiming self employment profits for your earnings period which will be different to your accounting year (and what is provided for HMRC). Therefore you will be drafting a separate set of accounts for UKBA.

So for HMRC your accounts will cover Aprill 11 to April 12 and for UKBA your accounts will cover January 12 to December 2012.

Profit levels will be different simply because different things will happen across the different periods. The main thing is that you are not inflating earnings and/or reducing tax liabilities when you shouldn't!

Also:

My profits from January 2012 to April 2012 were £15,000 but due to more earlier expenditures and loans, it reduced to £10,000.

Loan repayments do not impact on profits although loan interest will.