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Expense - which tax year?

Expense - which tax year?

Self employed:

If a self employed person agrees for a professional to do some work and receives a quote on 10 February 2016 and the quote is then agreed along with a deposit but...

Work will not begin until last week of march 2016 and be completed in the 1st week of April 2016, payment to be given on 2nd week.

For the self assessment: would this expense go into 1516 or 1617?

I am inclined to 1516 as that was the invoice/quote date and it's the professionals availability that pushes it into the next tax year.


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21st Feb 2016 23:56

When are

 the the accounts prepared to?

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22nd Feb 2016 05:20

And what type of professional work is it? Is it by any chance the preparation of the accounts of the business? That is relevant to knowing ether it is conventional to accrue the expense regardless of the work not having been done at the balance sheet date.

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22nd Feb 2016 07:51

And the right question is not "which tax year" but "which accounts year". The tax year will follow from when the profits in each accounts year fall to be taxed. So the only question that matters is in which period's accounts should the expense be included.

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22nd Feb 2016 09:51


you gave it away John

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23rd Feb 2016 22:30

Sometimes the mix of help on here is crazy!

This is a self assessment!

The answer, in simple terms, is the invoice date.

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23rd Feb 2016 22:41

So you knew the answer but asked anyway.

However, as I asked originally, to what date are the accounts prepared? Or are we to assume that they are prepared to 31/3/2016, or possibly 5/4/2016?

You realise that it does make a difference, say if accounts were prepared annually to something other than 31/3 - 5/4?

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23rd Feb 2016 22:46

Depends. Could be cash basis so when its paid ..... ie both years.

historical cost and the matching concept would be the accounting period in question (accrual) regardless of when invoiced or paid. Full cost allocated to period in question. Accounts or tax return made up too 5 April 2016 and paid 15 June 2016 would still allocate total cost to your 15/16 return/ accounts.

Also if its for professional accounting services then you don't need to worry about it as the professional will know the correct treatment......... I mean look at this tread, everyone in agreement ..... Ahem, cough, cough!!!

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23rd Feb 2016 23:00

I thought under self assessment there is only 1 date (year end 5 April).

I never knew the answer, I asked an accountant!

Though I do understand what you are saying :-)

Thanks for your help all!

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23rd Feb 2016 23:31

Theres is
Of course there is but its the year ending in the tax year that is taxed. Overlap profit etc.

Sole traders and partnerships can have accounts made up to any date in the tax year. No just 5 April.

Even under self assessment tax payers have options on what basis they wish to draft there accounts.

If it was me id be looking to accelerate tax relief if it was possible and excluding the cash basis then i would have accrued the invoice total value into 15/16

All the SA returns i done in Jan 2016 related to 14/15 and all my invoices where accrued into the 14/15 returns even though id only accepted some engagements on Jan 2016 and invoiced in Jan 2016

Hope that load of gibberish made some sense before i head to la la land....... Zzzzzzz

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24th Feb 2016 11:39

The TAX year ends on 5 April

For the self employed the profit that is assessed in the tax year depends on the accounting year and basis period rules for assessment, hence the question that itself leads on to the considerations mentioned by John

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24th Feb 2016 09:09

Tax Year end

We'd still be looking at a 25th March year end in 1516.


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