Self employed people.

[cockercas]

I'm sub contracting building a big house, the customer is about to run out of money ( due to been robbed of 30k)and part of isn't water tight (I've just put the roof on) so it needs covering in really. He can't afford to pay the main contractor and seen as he's decent I've offered to get it covered in and he can pay me when he's got some money.

How do I go about the tax return? The hours I've worked will be this tax year but I probably won't get the money untill next tax year.

So what years tax return do I put it down on?

[Tango]

I'm not self employed, so I could be talking out of my *rse.....but you pay tax on income......so you don't pay tax until you get your mitts on it. If matey defaults and don't pay you the tax man isn't gonna hand their bit back without a fight.....

[Stu]

thats how I understand it too

you only pay on when you receive it not when you think you might be getting it

[cockercas]

It's linked to hours though. That's the bit I'm confused about.

[Chrissb6]

thats how I understand it too

you only pay on when you receive it not when you think you might be getting it

Agree Stu, you should only pay tax on received payments - income

[cockercas]

No, I've just found it on the gov website.

I need to put it on this years tax return but list as not received

Example

You invoiced a customer on 28 March 2014. You record that invoice for the 2013 to 2014 tax year - even if you didn’t receive the money until the next tax year.

[Stu]

but then you still wouldnt pay tax on it till its received?

and probably at this years rate too

so if the rate went up you wouldnt pay more etc

[Joeman]

Make sure you include all of the expenses for the job in this years return thus lowering your taxable profit

But you're really gonna do a job for a bloke with no money and wait till April to get paid?? Brave man...

[cockercas]

Now I'm confused again, it says it depends on how I want to fill the tax return in either traditional or cash based. If it's cash based I put it down when I receive payment.

Also said I don't need to keep a record of hours so that's a win.

[cockercas]

Make sure you include all of the expenses for the job in this years return thus lowering your taxable profit

But you're really gonna do a job for a bloke with no money and wait till April to get paid?? Brave man...

 

Yer, it's not a massive roof probably a day to get it latted and felted, day and a half to stick 8 velux in and a day and half to tile and ridge it.

So at worse I lose 4 days I've worked, he will pay though even if it's not in £££s il be taking £600 worth of tools.

He needs a big set of gate pillars and a bit of fancy brickwork building so without paying me first they won't be getting built.

[Phooey]

You may well chose to file the invoice when the work is done but you only claim income on the Tax form when you receive it. It is not income till it comes in.

As was said above though, make sure you claim your expencies in this Taxx year. It went out this year.

Good luck.

[cockercas]

Will do, thanks.

[Fozzie]

You could set up a business account with a bank and register yourself as a business... Then take some more of this work on. Being self employed can be very profitable!

[TC]

Get yourself an accountant. A decent accountant will save you more money than the fees they charge.

Plus its a lot less hassle.

[cockercas]

I already have a business account,trade accounts etc subbying is far less hassle for about the same money. I finish at 4:30 and no going home to price jobs/organise deliverys etc.

[fredc]

If you are using 'cash basis accounting' you only include it when you have the cash in your hand

if you are using 'traditional accounting' include it when you issue the invoice

https://www.gov.uk/simpler-income-tax-cash-basis/overview

edit : you will be on traditional accounting by default until you choose cash basis