Sole Trader Expenses and taxation

I am a sole trader and close my year-end in line with the fiscal year, so I will be doing this fairly soon. A key question arises which I could do with help on:

I have both an income tax and class 4 NI liability for the 14/15 tax year which has been tracked by QF and my own spreadsheet analysis. I am aware I have from now to the end of Jan 2016 (latest) to submit my self-assessment online to hmrc. I assume that it is only when I have submitted that the amounts become payable? Let’s say I close the year-end in QF and do the self-asses’t in July this year, does the total amount I have to pay (which I know comes out of drawings) figure in my 2014/15 or 2015/16 books?

Payments of sole trader income tax and NI don’t figure in your business accounts at all as they’re not business expenses. If you pay the money to HMRC from your business account you’d tag the payment out as a transfer to drawings (you’re taking personal money out of the business, the fact that you then use that money to pay your personal income tax bill is of no concern to your business).

You can submit the SA return any time between now and the end of next January (as long as you have all the documentation available, e.g. you need to wait for your P60 from any employed jobs). You don’t have to actually pay the tax until January even if you submit the return earlier, though they are unlikely to complain if you pay sooner.

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