which tax year for work I've done but not been paid for?

[itsnotatoy]

I have 2 pieces of work that I have done in March 09 but not been paid for.

I have already invoiced for one but money has not come through, the second piece I have forgotten to send the invoice but will send this week.

Anyone know which tax year does the money fall into?

thanks

Am also awaiting payment for work done last tax year. I haven't checked with my accountant yet but I am working on the assumption that HMRC is interested in income received between 6 April one year and 5 April the next year, and not especially interested in what work was done for that income and when it was done.

DH and I always count it as falling in the tax year in which we invoiced it.

it's the year that the work was done in

I know this because I asked the IR once

Yup, the year in which you earned the money, ie when the work was done.

if it was invoiced then it is included at the invoice date.

However, even if you havent invoiced it, it could technically be 'work in progress' as at 05/04/09 and therefore still included

well I never - I would have assumed, like fbb, that all they cared about was income hitting your bank account. but, thinming again, I guess doing it fomr invoice dates means they get their share earlier. hmm

thanks all - I was thinking it would be last year which is a shame as I've gone over my tax allowance.

See, this is why I have an accountant, clearly I am far too clueless to do this myself

now, I would say you could use either way (ie inv date or paid date) but you need to be consistant.

It depends whether you produce a profit and loss account or and income and expenditure account at the year end. If P&L it'll be inv date, if I&E then date received.

Accountancy and tax matters are rarely clear cut IMO

Not true eddas, income and expenditure accounts are not in general acceptable for income tax purposes.

So the OP must include work done in March in the 2008/9 accounts. The flip side of this is that any costs which can be accrued in March (even though invoices have not yet been received) will reduce the amount of profit, hopefully back below the threshold mentioned.

I think the rules changed recently where all work done has to be accounted for in the year it was done whether invoiced or not. It would be treated as work in progress.

FWIK it used to be OK to report it when the money was received.

i'm always open to being told i'm wrong, tis not unsual I vaguely remember something about it used to be ok but has changed, I seem to remember my boss getting very anxious that we bill everything possible at our year end to avoid having to work out work in progress(well there's always some but he had visions of alot of WIP)

I think some rules are a bit off for small businesses, I mean, for VAT purposes cash accounting is used so why is it not possible to use this theory for year end figures? The madness of the tax system IMO