I met a new client today who has technically been self employed since at least April 13, maybe even April 12. Difficult to judge where hobby turned into trade. Its definately a trade now with contracts for services rendered for £4k, £1k etc. There is no tax to pay 12/13 or 13/14 however. Business may have been carried out with a view to a profit but it didn't make one.
What sort of view will HMRC take on the late submission of 13/14? Would it attract full penalties for late submission? Or will he be able to register and submit 13/14 late? Any advice?
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Is there an obligation to notify if no tax liability
I have always understood that there is no need to notify unless there is a tax liability. Therefore in your clients case, no liability in earlier years, then no need to notify. I have had situations in the past and have dealt with it by an old fashioned paper 64-8 and a covering letter explaining the situation to HMRC and giving details of when the first liability arises
Tax is not the problem
Assuming that he was not already in self-assessment, I agree that there is no requirement under s.7 TMA 1970 to notify HMRC if there is no tax liability and hence, no penalty can arise.
In theory, there is a penalty for failure to notify a liability to Class 2 NI contributions by 31st January following the end of the tax year, amounting to 30% of the outstanding contributions, so all of about £40 a year, but if he made a loss, he would have been entitled to the exception for small earnings.