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Diving dilemma

03 September 2008
Issue: 4174 / Categories: Forum & Feedback
Determining a diver's taxable income

A client has been carrying out diving operations in UK territorial waters. The earnings are classified as income from self-employment for income tax purposes and exempt from Class 4 National Insurance contributions but are income from employment for National Insurance purposes and hence liable to Class 1 contributions.

In determining the income to be assessed in the year does one follow the Schedule E rules and treat the income as taxable in the year of receipt (he is paid one month in arrears) or as income of a trade bearing in mind UITF40 with the profits brought into account on a daily basis when that day's diving is finished?

The amounts involved can make a reasonably substantial difference to the liabilities and/or mean that payment of tax is deferred and I would be grateful for advice from Taxation readers in this regard.

Query 17 263 — Sunk.

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