SueW started this topic @ 12:34 on 14/04/2006
My partner is in the construction industry (painter) and has been told that as he is currently not subcontracting and working on private jobs he is quoting and getting, then he has to have a separate business bank account and bank all his earnings into it, to show proof of income to the tax man.Does anyone know what the tax rules are on being a sole trader and bank accounts and paying tax.
RE: Sole Traders
James Smith | 14/04/2006 02:07 PM
You don’t HAVE to have a separate bank account as a sole trader, but it does certainly make things a lot easier when keeping your records and making sure you have got everything. This is even more important when it comes to potential "cash" trades when you will inevitably be asked about cash in hand work.
Your partner must however register with the Inland Revenue within 3 months of starting to trade, and pay National Insurance contributions. He must then complete a "self assessment" tax return every year, which he is presumably doing anyway if he is in the CIS scheme as a subcontractor. If you aren’t used to doing these, you can perhaps do them yourself, or use a professional to help you get it right and ensure you are claiming all the tax deductions that are available to you.
If he has been doing this for more than a month, then his first tax return for the period ending 5th April 2006 will need some attention by the end of September, or the 31st Jan 2007 if he is using someone to calculate the tax for him.
Hope this helps.
Regards,
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
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