Sole Trader Financial Requirements (What dates??)

[StuartG]

Hi,

My wife is Canadian, we married here in March, and we've our appointment booked at a service centre in just under 3 weeks for our first FLR (M). She's on a Tier 5 YMS Visa at present.

We're using my income as a self employed sole trader to reach the required amount (My income's around £24k per year, my wife unfortunately makes under the threshold). Now my accounting dates have always been 9th May - 8th May (for the previous eleven years since the business started). So I have prepared everything asked for in the tax year 16/17, my accountant has prepared my accounts for 9th May 2015 - 8th May 2016 and all documents / statements etc relate to this period. The first accountant I was with set my accounts up like this, not the standard April to April - but I have been assured by other accountants, accounting forums and even advice on HMRC's website that this is a perfectly acceptable way to do my accounts and file my tax return. My current accountant says this is all fine.

However... In Appendix FM 1 7 Financial Requirements for FLR (M) it says in section 9.3.1:
"For those self-employed as a sole trader, as a partner or in a franchise, the relevant
financial year(s) will be that covered by the self-assessment tax return and in the UK this runs from 6 April to 5 April the following year." That to me reads like the Visa Office will only accept accounts from sole traders for 6 April - 5 April! So although I am earning £24k or so a year consistently I will never be able to have this accepted by the visa office as my accounting dates don't match up with what they want!

Does anyone have experience of a sole trader having different accounting dates to the more typical April - April dates? I really hope I'm misinterpreting the Visa Offices notes here and am worrying about nothing.
We'd appreciate any help massively!

Thanks,
Stuart (& Claire)

[Ricky147]

Don’t worry boss apply with close eyes if you earning 24k don’t worry about dates as long you paying you tax on time 100% sure

[StuartG]

Thanks for your input Ricky, do you speak from experience of going down this route? Just everyone else I have seen on forums etc has seemed to suggest it will not be allowed, and my accounting year should be April - April (at least to meet the Visa requirements).

[Ricky147]

As long as you paid your 2015/16 tax bill before 31/01/2017 and second payment on account for 2016/2017 before 31/07/2017 it’s fine and for sole traders why not u show your self employed income for last two full financial year that will cover 5 April 2016 to 4 April 2017 they just want your income should be above 18600 for the financial year whit reconcile with your accounts you submitted to hmrc they want all that and your accountant letter confirming how these figures came If you are self employed for long time shouldn’t be any problem

[StuartG]

Thanks again Ricky, that's exactly the way I would interpret it too. I'm just concerned from reading here and other forums the advice to sole traders has consistently been "you need to have accounts from 6th April - 5th April or else they will not grant the Visa / FLR!".

Can I ask have you been through the process like this yourself to know for sure that they will be Ok with non April-April sole trader accounts? Common sense would dictate that my accounts will be OK, but I've seen someone with a rejection letter from the VISA office that said (among other reasons) "Your accounts do not appear to cover the period of the tax year, namely April - April".

[Ricky147]

To be honest the only option you got now do your tax affairs from April to April
Because if you seen that on refusal letter then this is true that they just need any excuse to refuse the settlement visa I heard from lots of ppl they refused visa on minor silly things so you can’t do nothing the thing u do is change the way you do your accounts
And also plz don’t take me wrong I can’t understand if you living in uk why you not doing your accounts according to uk law I mean April to April
I seen in my long life experience people who do things out the guidelines of the country they living in at some point of life they get into trouble
Wouldn’t be any problem if your tax affairs from last 11 years was from April to April
I m not advising you just a example please don’t take me wrong
I m a sole trader as well from last seven years mine tax returns are from April to April never had any problem
Now in your case it’s fine doesn’t matter what dates you do your accounts as you said hmrc got no problem from last 11 years all they need tax from you
Now home office is right cuz they follow uk gov law guidelines that’s why ask April to April
According to uk law tax year run from 6 April to 5 April next year
Hope my answer put some light in your case
Again plz don’t take personal I m sharing my thoughts
Thanks Ricky Hatton

[StuartG]

Hi Ricky,

Thanks again for your input. I am doing my tax return correctly and lawfully, as clarified by several accountants and HMRC itself. I pay tax for the tax year 6th April 2016 - 5th April 2017 on my profits from my accounting period from 9th May 2015 - 8th May 2016 (It might seem weird, but that's the way it works for sole traders with different accounting dates to the tax year). This is definitely correct, although my accountant says only 2 of their other 120 sole trader clients have their accounting year not matching the tax year, so it's uncommon although completely allowed. Again, this is perfectly OK when it comes to submitting tax return paying tax etc.
My worry was that the Visa office guidance seems to suggest that they don't accept the possibility of accounting year not matching the tax year (although fine for paying tax I was concerned it doesn't necessarily suit what the Immigration department require).

Eventually I just paid and asked a lawyer about this (£150 for a phone call where I could ask as much as I wanted and any follow-ups within 7 days). Along with lots of other useful advice, they said that as long as the accounts / statements etc I submit are covered by the 16/17 tax year I should be OK. So I CAN submit documents for 9th May 2015 - 8th May 2016 for the tax year ended. Though they have advised me in addition I should produce bank statements (both personal and current) from 9th May 2016 - current date, to show evidence that I have been continuing to earn the required amount. I appreciate you were trying to help but it seems you don't have any experience or expertise of the exact circumstances I asked about - with my wife's future in the balance I needed something more concrete to go on.

I only wish my original accountant had set up my tax year and accounting year to run the same dates like most other people, will probably look to get it changed next year (I can't change it this year like you suggest as it would make my accounts 23 months long and mess up the requirements for this visa application (has to be a 12 month period)).

I'll post back in a couple of weeks and let people know how we get on - hopefully this will help others in the future in a similar situation.

Stuart

[mobeen87]

Hi Ricky,

Thanks again for your input. I am doing my tax return correctly and lawfully, as clarified by several accountants and HMRC itself. I pay tax for the tax year 6th April 2016 - 5th April 2017 on my profits from my accounting period from 9th May 2015 - 8th May 2016 (It might seem weird, but that's the way it works for sole traders with different accounting dates to the tax year). This is definitely correct, although my accountant says only 2 of their other 120 sole trader clients have their accounting year not matching the tax year, so it's uncommon although completely allowed. Again, this is perfectly OK when it comes to submitting tax return paying tax etc.
My worry was that the Visa office guidance seems to suggest that they don't accept the possibility of accounting year not matching the tax year (although fine for paying tax I was concerned it doesn't necessarily suit what the Immigration department require).

Eventually I just paid and asked a lawyer about this (£150 for a phone call where I could ask as much as I wanted and any follow-ups within 7 days). Along with lots of other useful advice, they said that as long as the accounts / statements etc I submit are covered by the 16/17 tax year I should be OK. So I CAN submit documents for 9th May 2015 - 8th May 2016 for the tax year ended. Though they have advised me in addition I should produce bank statements (both personal and current) from 9th May 2016 - current date, to show evidence that I have been continuing to earn the required amount. I appreciate you were trying to help but it seems you don't have any experience or expertise of the exact circumstances I asked about - with my wife's future in the balance I needed something more concrete to go on.

I only wish my original accountant had set up my tax year and accounting year to run the same dates like most other people, will probably look to get it changed next year (I can't change it this year like you suggest as it would make my accounts 23 months long and mess up the requirements for this visa application (has to be a 12 month period)).

I'll post back in a couple of weeks and let people know how we get on - hopefully this will help others in the future in a similar situation.

Stuart

ANY UPDATES ABOUT YOUR CASE?I am in same situation as u are,ur update will help us,
Thanks