Tax filing by accountant and Tier 1 extension( Important )

rpsarangi · Post by **rpsarangi** » Wed Sep 05, 2012 12:21 pm

I am really stressed after reading a paragraph which have forced me to ask this question to members . I am going to ask that with an example for better understanding of my point . Its in 2 parts which are linked.

For example..
My gross income from self employment (sole trader) for 2011-12( till april 2012) is 10000.
I have paid tax to HMRC 2000 for 2010-11( already paid)
My expenditure for 2011-12 is 1000.
Question part 1:
While filing tax for 2011-12 does my accountant.
1.Takes only 1000 out of 10000 to say my profit is 9000 to HMRC
2.Or does he will have to take3000(1000 expenditure+2000 tax already paid) to say my profit is 7000 to HMRC.

Then the 2nd part , I have an extension in october so I am showing business account till september 2012.
question part 2
while writing letter to UKBA about net and gross profit of my business.
1. does account have to take out ( expenditure+tax to pay for 2011-12 ) out of total gross to say net profit.
2.Does accountant have only to take out expenditure from gross to say the net profit. and the tax for 2011-12 which is filed doesnt come to figure.

waiting for reply....

rpsarangi · Post by **rpsarangi** » Wed Sep 05, 2012 1:15 pm

any suggestion please..
this doubt has come after reading the guideliness point no.93 of UKBA which says
'If an applicant is self-employed and has chosen to retain the profits within the business ,his /her earning is limited to the share of the business net profit to which he/she is entitled to. The appropriate proportion of the net profit of the business( that is ,after tax and outgoings) can therefore be counted as the gross salary of the applicant.'

Please refer to my question relating to this paragraph to clear my doubt.

thanks

scorpio_besal · Post by **scorpio_besal** » Wed Sep 05, 2012 7:12 pm

I thought if you are sole trader than your earnings that will be assessed are the profits of the business before tax.

Even I am confused after reading above mentioned point about the sole traders self employment earnings assessment.

Lets wait for other members to respond who have got their extension as sole trader.

rpsarangi · Post by **rpsarangi** » Wed Sep 05, 2012 8:17 pm

thanks scorpio for the reply..i have rephrased my question for better understanding of the members ...lets wait for the reply.

scorpio_besal · Post by **scorpio_besal** » Wed Sep 05, 2012 8:24 pm

Are your customers limited companies or individuals ?

rpsarangi · Post by **rpsarangi** » Wed Sep 05, 2012 8:27 pm

i m sole trader

scorpio_besal · Post by **scorpio_besal** » Wed Sep 05, 2012 8:29 pm

so your customers are sole traders??

rpsarangi · Post by **rpsarangi** » Wed Sep 05, 2012 8:36 pm

my customers are companies and individual persons.
what about your customers and do you operate in limited company structure or as sole trader.

scorpio_besal · Post by **scorpio_besal** » Wed Sep 05, 2012 8:41 pm

my customers are individuals, I work as a designer (sole trader), how about you, what do you do as a sole trader??

rpsarangi · Post by **rpsarangi** » Wed Sep 05, 2012 8:44 pm

I have already replied to your question . I am a Sole trader and my customers are companies and individuals.

Any views on my question that I asked according to your understanding...Now days I dont see many Gurus or experts or moderators replying as they have more experience than us and have a better understanding of the HO process.

scorpio_besal · Post by **scorpio_besal** » Wed Sep 05, 2012 9:12 pm

Buddy, I am sorry if you are annoyed by my questions, I was only asking what do you do as a sole trader.? Ignore it , if you dont wish to answer.

vikasbirla · Post by **vikasbirla** » Wed Sep 05, 2012 9:52 pm

I am not an accountant but have a limited company. According to me it should be like

"he will have to take3000(1000 expenditure+2000 tax already paid) to say my profit is 7000 to HMRC. "

Just hire a good accountant for the best advice.

rpsarangi · Post by **rpsarangi** » Wed Sep 05, 2012 10:19 pm

Thanks scorpio , I am not annoyed at all with your question ..,
Thanks vikasbirla ... So are you answering my 1st part of the question or the 2nd part .. To my understanding you are answering my 1st part ... That my accountant have to take out my expenditure and tax which is already paid for the last year from my gross to file the tax returns till April 2012. Is that right what I understood , correct me if I mis understood you .. But my question is tax for last year is paid and while filing for 2012 till April why he have to consider that as that is not being paid from gross this year but have been paid from profit of last year of last year .

silverline · Post by **silverline** » Wed Sep 05, 2012 10:21 pm

Your Net profit BEFORE TAX [i.e. Gross earnings - expenses only] will used for UKBA.

I am Chartered Accountant and hope it helps..

now sleep well.

Regards

rpsarangi · Post by **rpsarangi** » Wed Sep 05, 2012 10:25 pm

Thanks silverline
So accountant will have to take out one the expenses from gross to give the net figure to UKBA.. Is that right? Within the period claimed .

What about the tax which is there for 2011-12 as I am going to file that next week ..will that come under expenses or it's just the gross figure minus the expenditure ...
Sorry i am a bit confused that's why i wrote my question in 2 parts as the tax period is April 11-12 and my claimed period will be October 11- September 12., that's how I am getting confused.

silverline · Post by **silverline** » Wed Sep 05, 2012 10:36 pm

[quote="rpsarangi"]Thanks silverline
So accountant will have to take out one the expenses from gross to give the net figure to UKBA.. Is that right? Within the period claimed . Your accountant should have told you about this. Tax/NI bill is not relevent when calculating net income for point base system.

What about the tax which is there for 2011-12 as I am going to file that next week ..............Make sure you pay your NI/Tax bill before submitting application to UKBA. Unlike employed, self-employed is responsible for tax/NI payments .

rpsarangi · Post by **rpsarangi** » Wed Sep 05, 2012 10:58 pm

I just came up with the doubt after reading certain paragraph of the guidelines.. I am sorry if the doubt is silly .. thanks for the reply.

silverline · Post by **silverline** » Wed Sep 05, 2012 11:53 pm

rpsarangi wrote:I just came up with the doubt after reading certain paragraph of the guidelines.. I am sorry if the doubt is silly .. thanks for the reply.

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Tax filing by accountant and Tier 1 extension( Important )

Tax filing by accountant and Tier 1 extension( Important )