Sole Trade

Overview

If an individual has a sole trade business, the HMRC require data to be updated in the form of an update period, which must be sent to them in intervals of no longer than 3 months. (These update periods can be submitted more frequently if desired).

Adjustments and Allowances is an optional submission and is not required by the HMRC in order to meet the individuals yearly tax commitments. However, where an individual does in fact have data within this submission it can be submitted at any point within the year. It is however prudent to submit with the final update period.

Once all submissions have been made, an end of period statement must be submitted in order to finalise the sole trade details for the tax year. The ‘Confirm and Submit’ option within IRIS will be disabled until all the quarterly obligations are shown as ‘Obligations met’ within the obligation table.

 

What are Update periods?

Periods are the time allocated snapshots of a client’s accounting year that are sent to HMRC. Sending a client’s information in this way means HMRC receives a more up to date understanding of a client’s tax position and the client receives a more accurate and up to date HMRC calculation.

The user can set the frequency of a client’s update periods, as long as they meet the mandated obligation windows that HMRC set.

 

Update Period values

This table below lists the values that can be sent over to the HMRC for an update period:

Income Expenses (total and disallowed)
Turnover Cost of goods bought
Other income/profits CIS payments to
  Cost of goods bought
  CIS payments to subcontractors
  Travel costs
  Staff costs
  Professional fees
  Premises running costs
  Other
  Maintenance costs
  Interest
  Financial charges
  Depreciation
  Bad debt
  Advertising costs
  Admin costs
  Business entertainment costs

 

 

Adjustments and Allowances

The adjustments and allowances submission reflects the year’s adjustments and allowances for the sole trade. This submission unlike that of the update periods, only needs to be submitted once for the year.

This adjustments and allowances submission does not have any impact on the obligations set against the sole trade.

This table lists all the information that can currently be submitted to the HMRC:

Profit Adjustments Allowances
Income Income Included non-taxable profits Annual investment allowance
Expenses Basis adjustment Capital allowance main pool
  Overlap relief used Capital allowance special rate pool
  Accounting adjustment Zero emission goods vehicle allowance
  Loss brought forward Enhanced capital allowance
  Outstanding business income Allowance on sales
     
 

 Balancing charge other  

  
 

Goods and services own use  

  

 

What is an EOPS?

Sending an EOPS, or an End of Period Statement, represent the user’s final act and agreement with all data they have previously sent to HMRC for an individual instance.

A user can review that data in the form of the small micro computation on this screen and if correct, click ‘Confirm and Submit’ to confirm they agree with the disclaimer provided by HMRC.

 

Micro computation table

This table will display a calculation of all figures entered in Personal Tax for this particular income type instance and represents a smaller version of the tax calculation that can be run within Personal Tax.

Obligation table

This table displays the obligations periods set by HMRC that nee3d to be fulfilled before a user can send their End of Period Statement (EOPS) by clicking ‘Confirm & Submit’.

Update Period sidebar

The sidebar will show all of the periods for that selected income type instance. Clicking any of these will function similarly to the table above and take the user through to a new page displaying values relating to that update period.