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Penalties for registering as self-employed

Late registration (possibly!)

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Client ran a trade as part of a company which went into liquidation in February 2018.  Client then started again with the same trade as self-employed from March 2018.  She didn't register as self-employed at the time with HMRC.  However she has a UTR and has submitted a tax return for several years, including 2017/2018 (which didn't mention this self-employment).  Client thought that as the trade was loss-making / below the personal allowance she didn't need to register.

My thoughts: First year of business runs from March 2018 to February 2019, therefore falls into tax year 2018/2019 and turnover, profits, etc should be included in the 2018/2019 self-assessment tax return (i.e. HMRC have not lost any revenue).

Are there any penalties for late registration? Any other penalties?  

HMRC website, as usual, is useless.  Just refers to completing an on-line re-registration form if a UTR already exists.

Thanks as always.

Replies (7)

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Hallerud at Easter
09th Dec 2019 18:20

What about 2017/2018? A part of the first set of accounts needs declared for this year. If she started in March 2018 she trades from date she started to 5/4/18.

Thanks (1)
Replying to DJKL:
Pile of Stones
By Beach Accountancy
09th Dec 2019 19:18

Of course! - I'll go back to the client and ascertain the true commencement date.

Thanks (0)
By memyself-eye
09th Dec 2019 18:25

Late registration is the least of HMRC's issues. If she has a UTR just submit as usual.

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By SteveHa
10th Dec 2019 08:42

I don't see an issue at all. If there was no income arising and subject to tax in the short period between commencement and 5 April 2018 then there is nothing to notify.

In any event, S7 specifically does NOT apply if a notice to file has been issued (TMA 1970 S7(1A))

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Replying to SteveHa:
By lionofludesch
10th Dec 2019 09:43

SteLacca wrote:

I don't see an issue at all. If there was no income arising ........

We don't know that - it's just implied.

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Replying to lionofludesch:
By SteveHa
10th Dec 2019 12:50

Agreed, though an explicit reference to the loss making business is a heavy implication.

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Pile of Stones
By Beach Accountancy
10th Dec 2019 15:30

Thanks for the reference - I need to see the figures from the client

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