Stopping and re-starting Self Employment
Client's accounts (gardener business with 2 employees) have always been prepared to December, and he has overlap profits of £800.
on 31/12/2011 he moved 200 miles accross the country. he sold his business to one of the employees for £10k but this payment was only for his trading name and customer list, he sold one vehicle to an unrelated 3rd party and kept the other vehicle himself.
In Jan, Feb & Mar 2012 he was claiming JSA whilst looking for employment, and then in April 2012 he gave up looking for employment and started doing some small gardening jobs on a self employed basis.
I don't think that he ever told HMRC that he ceased and re-started self employment.
SO... Do I:
(a) Treat the 2 self employments as separate self employments - draw up accounts to 31/12/2011 which will be to the cessasion of the business, put in a market value of the vehicle he retained to calculate balancing allowance/charge and claim relief for the overlap profits, and then from 2012/13 just treat his small gardening jobs as a new business, or
(b) As both self employments are basically the same trade using the same vehicle should I treat it as a continuous self employment, not claim overlap relief and continue preparing accounts to December each year?
I phoned HMRC and they said it was up to me which way I do it, but I'm worried that there may be reasons why either way would viewed as wrong in the event of an enquiry.
Does anyone know which way is correct or is it really up to me (& the client) to pick one?
- Have I dropped a major clanger? 142 4
- Sorry ignore me 832 23
- How do I calculate the VAT due (cash basis) on receipts which suffer a cis deduction? 250 6
- Invoice Help 159 4
- Purchase of freehold by flat management company 123 1
- Rental property: expenses when up for sale and not let 273 6
- Employee overpaid who has left 164 3
- Peer to Peer lending 828 9
- VAT B2B V's Reverse Charge 76 2
- VAT On Conference Sponsorship 201 4
- Is this a scam? 490 6
- Entrepreneurs relief available? 275 6
- reliable alternative to registered ofice required 241 5
- Exactly which business miles can I claim from my employer? 1,231 17
- Childcare for clients 186 1
- One off meeting new client 555 9
- Employment allowance (again) :( 177 1
- illegal dividends 354 3
- Should Spanish VAT apply ? 205 3
- VAT questions 315 4
- Proposed Amendments to IAS 1 619
- Property exchange - 8-year legal delay following fall-out 527
- Accounting for Insurance Premium Financing 381
- SAGE Payroll Data for Import to MS Dynamics AX 291
- Cancelled 279
- Cancelled 241
- Have you staged yet for auto enrolment? 184
- Sage Report Designer - Nominal Activity in Currency 184
- Probiz 166
- What's the market like for temps? 160