Going self employed, my friend is worried about what and when to declare

[martin2006]

She will need to inform HMRC of her s/e status within 3 months of initial startup.

Was she in any benefits which would have restricted her working/earning whike these "bank deposits" were going in her account?

[martin2006]

If she were to inform HMRC now she could include the last 3 months in her tax return when she receives it, i think from memory NI are notified by HMRC but worth a call followed by a letter to confirm to both

[martin2006]

If she has earned from the tailoring business in the last 2 years and there is traceable payments going into her bank account then i wouldnt advise trying to cover that up, HMRC can backtax for 6 yrs i believe.

If its a negligible amount and falls under the tax threshold for each year, i would declare it personally, if they choose to investigate her at random as HMRC tend to do and they uncover irregularities after you have told them a later start date, its a can of worms and hassle you dont want

It may involve a small penalty now but alleviates a larger fine later

[martin2006]

late returns, late payments etc attracted an initial £100 penalty.

 

She would be well advised to employ an accountant to deal with her tax, they are able to claim far more than you would be as an individual. For me, it was worth every penny of the approx £500 a year it costs.

[martin2006]

 

Now she is much better and feels like the tailoring business could pick up and potentially be a full time self employed job for her.

 

In which case, an accountant would be a sound business decision and would save the OP more than the cost of the accountant.

 

The only silly thing is the suggestion that having one is "almost silly"

[martin2006]

Thanks Martin for the little dig there, very helpful and professional slagging of a forum member who simply has an opinion, do you feel threatened by me or something because I do not need to enlist the services of an accountant because I am capable of doing it myself. My post was bang on accurate in its content, if a brand new business start up is going to earn more than 15k NET profit after BASIC expenses in its first year then dang, well done that person, but id doubt it.

 

Please enlighten me how i have "slagged" anyone off?

 

I am certainly not threatened in any way, i gave my opinion based on 20 years experience.

 

I fail to see how "sizeable net income" and "worthwhile amount" help the OP in any way, especially from somebody "good with numbers" who chooses to use none.

 

Your post was vague at best and far from "Bang on"

[martin2006]

You are of course entitled to your opinion, as i am entitled to mine, lets leave it at that before this takes over the OP's thread

[martin2006]

Nobody here is going to advise that you keep the last 2 years quiet from HMRC

 

If your friend doesn't disclose then she takes a risk, if she does disclose she may face a penalty for late filing, "she" has to choose her course of action herself