Sole trader accounting year

[Dantean]

If a self employed sole trader has an accounting year from 1 January to 31 December used for filing their taxes, is that the time that the Category F income for meeting the financial requirement for a partner visa will be calculated?

Due to highly variable income, the settled person's 6 April to 5 April income for this year would not be enough, but if calculated for their accounting year, it would.

[Dantean]

I've been informed that a sole trader cannot change their accounting year like a company can, so their income will always be calculated from 6 April to 5 April. So this particular sponsor will have to wait for the next tax year.

[Wanderer]

I've been informed that a sole trader cannot change their accounting year like a company can, so their income will always be calculated from 6 April to 5 April. So this particular sponsor will have to wait for the next tax year.

I think they can. You can expand or shorten the accounting year to align it (within some time limits) and apply overlap relief to avoid being taxed on the same profits twice.

Generally folks go for y/e of 31st Mar, HMRC accept this as the same as the tax year.

[Dantean]

Thanks. That's interesting. Do you think the Home Office would accept that for a financial year to establish the £18,600 ?

Section 9.3.1 of Appendix FM 1.7: Financial Requirement says:

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.

So I wonder if there is any flexibility there.

Section 9.3.2 says for directors, the relevant year will be the "12-month accounting year of the company."

It seems to indicate specific dates for the sole trader, but for company director whatever the company uses.

[Wanderer]

Thanks. That's interesting. Do you think the Home Office would accept that for a financial year to establish the £18,600 ?

Section 9.3.1 of Appendix FM 1.7: Financial Requirement says:

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.

So I wonder if there is any flexibility there.

Section 9.3.2 says for directors, the relevant year will be the "12-month accounting year of the company."

It seems to indicate specific dates for the sole trader, but for company director whatever the company uses.

TBH I'm not sure, UKVI some some strange ideas about self-employment especially with one-man companies, i.e. those contracting.

The above seems to imply they take the SA302 values for immigration purposes, which I suppose is fair enough and simple, the onus being on the applicant and the applicants accountant to ensure the figures reported on the SA302 are true and correct for that tax year, i.e. combine part one accounting year, part the next. Easy for professional accountant.

Any reason the person in question can't use the figures on his SA302?

[Dantean]

As far as I know, they would normally just show the SA302 and bank statements. But I just wondered if the case worker saw the corresponding bank deposits ran from January to December, if they might question the total and want to see the figures from 6 April to 5 April instead.

[Jatpunjabi]

Please note it MUST be within the same financial year for sole traders. I don't understand what you mean it runs from 01 Jan to 31 Dec. Only registered companies can use their accounting years. For sole traders its simply from 06 Apr to 05 Apr of next year and there's no alternative to this I am afraid. As most people suggested SA302 would be needed which covers full financial year. They make it very clear that figures from different financial years cannot be combined.