Which tax year?

[TurkeyTrot]

I have a main job which is PAYE and now have a bit of freelance work on the side, which I invoice in arrears. I will need to do a tax return for this.
My question is, does the tax need to be paid for the year I did the work, or the year I received the payment?
I have just invoiced for March and will be paid in the next couple of weeks - will this be part of 20/21 tax year or 21/22?

The tax year your invoice is dated I would have thought. Payment doesn’t matter but your invoice should be the same tax year as the work undertaken.

If you are using Cash Basis accounting with Simplified Expenses, then you record in your accounts when you actually get the money, not when you invoice for it.

Slight derail - self employment covid grant covers Feb to end of April.. How to add to tax return? 20 /21 or 21/22 or split?

@Aprilshowersandhail it will already be on your tax return, it uses the tax year where the money goes into your account

@TurkeyTrot nanny Nick Is right, you tick on your tax return which system you are using (so you could opt to include outstanding invoices however I use cash basis as what if they don’t pay?)

It probably doesn't really matter as long as you are consistent and count all income.

It's probably simpler to work on monies received, as you can just list the receipts into your bank account during the tax year as your income. Plus there's always a risk that you don't get paid.

Thanks everyone.
I am new to all of this and am not using any kind of system.
Basically I do a bit of work, at the end of the month I send them an invoice for X hours. They transfer £Y (no tax or NI deductions) to my current account and that is literally it.

Should I be doing something else? I'm a bit worried about getting into a mess down the line...

DP has been freelance for a decade and that's basically what he does.

When doing his tax return, he downloads the relevant transactions from his current account, adds them up in a spreadsheet and that's his freelance income for the year.

I think some people overcomplicate the process but as long as you could explain in an inspection how you track what you get paid, you'll be fine.

So grants 1,2 +3 in 20/21 and grant 4 in 21/22?