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My client was a subcontractor working as self employed for a company and HMRC have backdated his employment from September 2006 to 6 April 2006. The subcontractor has been trading for well over 20 years and his accounts have always been prepared to 30 June each year. This means that there will now be another nine months of profit to be brought into account as income for the year ended 5 April 2006. Taking off the overlap period, an additional assessment on around £7,000 of income will become taxable.
My client was a subcontractor working as self employed for a company and HMRC have backdated his employment from September 2006 to 6 April 2006. The subcontractor has been trading for well over 20 years and his accounts have always been prepared to 30 June each year. This means that there will now be another nine months of profit to be brought into account as income for the year ended 5 April 2006. Taking off the overlap period an additional assessment on around £7 000 of income will become taxable.
I am now rather concerned because I seem to have remembered that in the past the Inland Revenue — as it was — did not insist upon the cessation provisions being applied when this sort of transfer between self employment and employment occurred. Unfortunately I cannot find any specific mention of this in the HMRC manuals...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
