Urgent Advice for Tax Return

[Bendy]

Hi

I'm just starting to sort out my tax return for April 2010. :panic:

I just have a quick question which I hope you can help me with.

I invoice monthly and I am paid usually within 10 days which takes us into the following month.

So with regards to income received is this figure the money I have physically received in my bank account between apr 09 -apr 10

Or do I state the total figure of my invoices for apr 09 - apr 10. There is a difference of just over £500.

Actually as I type this I am assuming its money received, why on earth would I declare the extra £500 till next year. :blush:

Thanks

[hello kitty]

Your accounts should run April 09 to March 2010 so only include money in that time span.

Hth :)

[Chatterbox Childcare]

If you receive money in March 2009 for April 2010 work then I would add it in to March figures then at the year accrue it to the following year.

My understanding is that you go to monthly expenses if 2009 and put in pre payment for 2010-11 and - the amount so that you income is reduced

In monthly expenses 2009 write in accrual from 2009-10 and put the figure in as income

Hope that makes sense

The reason for doing it this way is so that your books/bank statements match should the IR come knocking

[Bendy]

I'm confused and it doesn't take much:(

I invoice at the end of the month for that month. So I work the month before I'm paid for it. (Mad I know but it is an arrangement I have with a friend and they are very reliable)

Example

March 2010 was invoiced on 31st March 2010 and paid 8 days later on 8th April 2010. Do I included March's money on my tax return if I haven't physically received it in my account until after the end of that tax year?

Any expenditure I incurred for March I was going to claim for. I assumed that was alright now I'm not so sure. :confused:

Thanks for your replies so far.

[sarah707]

It depends on what you put last year!!

If you included it in last years' income because you invoiced it last year then it's been counted as your income.

If you didn't include it in last years' income because you hadn't received the ££ yet, then it goes into this year.

Hope that makes sense :D

[Bendy]

Thanks Sarah

This is my first tax return, I only started up in September 09.

The only benefit would be to account for March 09's invoice in 09/10 even though it wasn't paid until 8 April 2010 as I didn't earn enough in this tax year anyway. Carrying it over to the next will only increase my tax bill as I will definatly be over my allowance next year.

I assume this would be allowed as the money was earnt in that tax year although not received until beginning of the next.

Please let me know if I've got this wrong.

[MaryMary]

I would include March 10 invoice into accounts for March 10, because that is what it relates to.

Just don't forget what you have done and include it in April aswell!! :eek: (that's the sort of thing I would do!!)

HTH

[Chatterbox Childcare]

Do the opposite of what I wrote

in the yearly box put accrual for payment not made £ (+ figure)
in yearly box of next year but payment for year 09/10 £ (- figure)

[Bendy]

Thanks everyone for your help.
:)