What should I do?

[tim_evo]

This looks like the best place to get some answers because the IR site really doesn't explain every situation clearly (if at all).

I started developing and selling software on a basic website Sept 2010 with a partner who already has their own company. The deal is that the software revenue is split 50/50 and go into paypal.

Since April 2011 I have been inundated with bespoke work that I have solely taken BACS payments for (invoiced etc) for UK and International Companies and earned just over 10k already (predominantly international companies).

The issue is 1) I've not registered with the IR as back in April I was under the impression that if I earned less than around £40k I didn't have to register or if its the first year of trade (don't know where I read that as it doesn't seem like the case).
2) I already have a full-time job earning £37k and didn't know if the work would keep coming.
3) Do I just state for my share of the software sold?

All records invoice/receipts are stored in an accounting system.

As it stands its clear that I'm overdue registering the business in any form. My question is that its obvious I'm going to have a 22% tax bill coming my way. Can I declare that I've just started the business and are there any benefits to bringing money into the country?

I'm going to get stung on tax big time going forward and wanted some clarification as to the rate that I'd be looking at so I can make a decision to simply stop the service and reside to the fact that it was a good idea if I wanted to get robbed by the government. On that note, also how did others overcome the tax issue from a psychological level, I'd prefer not to pot the new business?

any help would be appreciated. Thanks

 

[Vardan 89]

Your best bet would be to seek a Professional accountant advise. I myself is an ACCA affiliate but with whatever knowledge I have got, I can say as below

1)Contact IR and let them know that you started a self employment business from Sept 10. I am sure starting a LTD company might have got its own tax benefits, but given your registration is overdue, just go ahead with self employment business. Also with self employment business you paper work from IR will be less . Later down the line if you think you want to change to LTD, then it is just a matter of phone call to IR and tell them you have stoped SE and do your final return then.

2) Once self employment is set up, you can invoice your partner's firm with 50% of the revenue until April 2011
3)Ask them to send you a self assestment form for April 2010- April 2011
3) Submit your first return from Sept 2010 - April 2011 ( It is easy to keep the same tax year as your Personal Income Tax year 6 April - 5 April
4) Continue same process going forward.
Unfortunately you can't escape your tax liability. You can investigate into options of benefits for bringin foreign money at a later stage.

Feel free to PM if you need any help with this or self assessment form aspecty and also I can try finding about benefits (if UK govt gives any) of brining foreign money
Cheers,
Darshan
Darshan