Hi everyone
I've done a little Googling but got answers either way, so I thought I'd try and seek some clarification!
I do some freelance work. The conditions are that I invoice around the 15th of every month, on 30 day terms, for all services provided in the previous window.
So on March 15, I invoiced my client for the dates Feb 15 to Mar 14. The work was done in the 2010/2011 tax year. The invoice likewise. It will get paid, no doubt, in the next tax year. But as I work from date of invoice, when it gets paid I go back into my accounts and mark it as if it was paid the very day I invoiced it. I think this is the right thing to do.
In theory then, on Apr 15, I will invoice again for the last window. This time the invoice is in the 2011/12 tax year, but most of the work will have been done in the previous tax year.
Which tax year, technically, should this income be declared in, if the invoice overlaps two tax years?
Mr Taxman isn't really going to care, is he? Nor will Ms Taxman, I hope?
Thanks
Reece