Basic question regarding new Limited Co and tax

[northernladuk]

In fairness, that would be a bit premature if the company doesn't exist yet (and won't exist for another 6 months).

That's fair but finding one and getting some advice upfront on the promise of business from August could save him time and problems.

[hobnob]

Why don't you have an accountant?

In fairness, that would be a bit premature if the company doesn't exist yet (and won't exist for another 6 months).

[hobnob]

Or do I need to do a Personal return for invoices during the period before company (Apr - Aug) and then also a company return for company invoices Aug-Apr?

Following up on what jamesbrown said, your personal tax year runs from Apr-Apr, while the company's tax year will run from Sep-Aug. That means that you'll still need to do a SATR as normal after Apr 2025, which includes any sole trader income and any income you get from the limited company (salary/dividends). Your company will also have to submit its own year end accounts after Aug 2025, and you'll need an accountant to help you with that.

[northernladuk]

Why don't you have an accountant?

[MarkusB]

The company didn't exist before August so it would be rather hard for it to invoice before August. [...] The first and most important thing to understand about a company is that it isn't you, it's a separate legal entity.

Ah yes, of course. Thanks!

[MarkusB]

Yes, a sole trader. The company is to be setup in Aug 2024.

[jamesbrown]

Here is that case for anyone interested:

https://www.casemine.com/judgement/u...94e06b9e19e690

Again, not relevant to the OP who received personal income and needs to complete a SATR indicating that income. Any invoices properly raised after incorporation would be company income, of course.

[jamesbrown]

( And to be absolutely clear, the special facts of that case I mentioned absolutely do not apply in your case because the fees were paid to your personally. )

[jamesbrown]

The company didn't exist before August so it would be rather hard for it to invoice before August. That said, it isn't quite that straightforward - there was a tribunal case about a decade or so ago (I forget the name) that HMRC lost in attempting to reassign pre-incorporation invoices to the individual who performed the work as personal income, but there were some special facts in that case. However, you can claim several pre-incorporation expenses, which is routine. The first and most important thing to understand about a company is that it isn't you, it's a separate legal entity.

[hobnob]

Invoices before August paid into Personal bank account. Invoice after paid into Business account.

I'm guessing this is related to your previous post (from 2022):
Consulting newbie in the UK - Contractor UK Bulletin Board
I.e. the old invoices are/were paid into your personal bank account because you're a sole trader?

Also, just to clarify, are you planning to start using a limited company later this year (Aug 2024) or did you start using it last year (Aug 2023)?

[MarkusB]

Thanks. Invoices before August paid into Personal bank account. Invoice after paid into Business account. (The nature of the services provided is same before and after.)

[WTFH]

Your accountant can take you through all of this.
How did you invoice before August, and what bank account was it paid into?
And what are the answers since august?

[MarkusB]

If I setup a limited company in August, when it comes time to complete my tax return can I record all my fees for that tax year against that company?

Or do I need to do a Personal return for invoices during the period before company (Apr - Aug) and then also a company return for company invoices Aug-Apr?