Frequently Asked Questions

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Q. My accounting year end is 12th August 2002. However, when my accountant does my tax return, they ask for certain information up to 5th April 2003, and say they don't require my income and expenditure details up to 5th April 2003 just yet.  Why?

A. Your accounting year end is 12th August 2002, so your accounts are prepared from 13th August 2001 to 12 August 2002.  However the UK tax system has April 5th as it's year end, so every year, your tax return information such as details of net interest credited to your accounts, need to be from 6th April 2002 to 5th April 2003.

So, how do your accounts fit into this?

Rather than set everyone's accounting year end to 5th April to match the tax year end, you are permitted to have a different year end. Then, rather than apportion 2 sets of accounts to get the exact results for 6th April to 5th April, only one set of accounts is used. This is chosen as follows:

1. What is the tax year?

6th April 2002 to 5th April 2003

2. Which accounting year ends within the tax year 6th April 2002 to 5th April 2003

13th August 2001 to 12th August 2003

 Q. When do I need to send all my records to you?

A. We generally ask that all your records be sent to us within 3 months of the accounting year end. This is so it enables us to complete you accounts and tax return within the required timescale, avoiding penalties and surcharges payable to the Inland revenue.

Also, should you be seeking a mortgage, a recent set of accounts is usually required, and if they are already prepared, will save precious time.

Q. I'm self-employed. Will I get tax relief on my national insurance contributions?

A. You will probably be paying class 2 NI at £2.05 a week, and class 4 at 8% on profits between £4745 and £31720 and 1% over £31720. There is no tax relief on either of these.

If you employ staff, however, you will get tax relief on class one NI Employer's contributions that you make.

Q. Why is the tax year 6th April to 5th April?

A. When the tax year was being set up the company tax year was set to 31/3 .  The same was proposed for individuals. However as a majority of tax payers were weekly paid and by setting the same year as the company it would have turned out that the

government would loose out on tax for 5 days and so I believe that 5th April had been fixed as the year end for individuals. This was to

Friday.

We take great pride in our service, and would be delighted to invite you for a free 1 hour, no obligation meeting at our comfortable offices. Simply call us  on 020 8346 0391 to arrange a mutually convenient time.

This web-site was last updated on 13/06/2008

Copyright © 2003-2008 Mac Kotecha & Company. All rights Reserved. The information on this site is for general guidance only. It is essential to take professional advice on specific issues about their impact on any individual or entity. No liability can be accepted for any errors or omission or for any person acting or refraining from acting on the information provided on this site.