Self employed: can I claim for materials bought before business start date?

pitkin2020

duncan303 wrote: »

mmmm?

doesn't everybody claim and charge back down the chain?

you still have to account for VAT on your outputs don't you?


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you cant claim vat back on products that dont have vat added on, for a start most carboots are used domestic products, the vat wasn't claimed back by the original purchaser, and unless they are trading as a business they cant charge you vat or claim the vat back in beginning they are the end user in the VAT line, you purchased it with no vat added on, but i would love to see you claim vat back with out a vat receipt.
The original poster is more than likely to be a sole trader under the vat threshold so there is no need to make it more complicated by adding vat into the equation.

duncan303

Hi Horace,

my last post was directed wholly to the quoted phrase of pitkin2020 and related to the premise that one doesn't need receipts to claim expenses.

I would have thought in a cash dominant business model, receipts were all the more important to guard oneself from becoming extreamly vunerable. Where is the audit trail? Playing with fire......no?

Anyway back to the OP.
In 1991(the last recession) I arranged an appointment with my local Tax Inspector to discuss being able to claim expenses against a proposed full time second degree. As the context of the degree was related to my existing business it was allowed, therefore study material and stationary and course fees were authorised to be allowable expenses. I did not request or need accomodation.

It was not easy and I did have to construct a proper argument and present it personally though, something an accountant might not do. At least that way I had a fixed guarantee, therefore allowing me to make the decision to proceed.

I remained self employed and personally VAT registered throughout the period (still am).
Obtaining a VAT receipt for the course fees at the chancellery was not easy.

It was my personal experience that prompted me to reply, Fengirl's points I still think are correct not only because they effect logically but also I had been conducting my established business for some number of years prior.

So:
If you want a discussion post on the forum...........................................FREE
If you want an informed educated guess ask an accountant..................it'll cost you
If you want the answer ask an Inspector.............................................FREE.

:D:D


.
Yikes Ive just noticed a new post. I'll post this anyway.

pitkin2020

duncan303 wrote: »

Hi Horace,

my last post was directed wholly to the quoted phrase of pitkin2020 and related to the premise that one doesn't need receipts to claim expenses.

I would have thought in a cash dominant business model, receipts were all the more important to guard oneself from becoming extreamly vunerable. Where is the audit trail? Playing with fire......no?

Anyway back to the OP.
In 1991(the last recession) I arranged an appointment with my local Tax Inspector to discuss being able to claim expenses against a proposed full time second degree. As the context of the degree was related to my existing business it was allowed, therefore study material and stationary and course fees were authorised to be allowable expenses. I did not request or need accomodation.

It was not easy and I did have to construct a proper argument and present it personally though, something an accountant might not do. At least that way I had a fixed guarantee, therefore allowing me to make the decision to proceed.

I remained self employed and personally VAT registered throughout the period (still am).
Obtaining a VAT receipt for the course fees at the chancellery was not easy.

It was my personal experience that prompted me to reply, Fengirl's points I still think are correct not only because they effect logically but also I had been conducting my established business for some number of years prior.

So:
If you want a discussion post on the forum...........................................FREE
If you want an informed educated guess ask an accountant..................it'll cost you
If you want the answer ask an Inspector.............................................FREE.

:D:D


.
Yikes Ive just noticed a new post. I'll post this anyway.

how can you say if you want an informed educated guess ask an accountant?? They are proffesionals in there sector, just because you had a crap accountant doesn't mean they are all rubbish, same as taking your car to the garage for diagnostics, the mechanic just makes a guess to what may be wrong............your arguement makes no sense.
As for claiming vat back you can only claim it back if YOU HAVE a vat receipt from a VAT registered business, you can not get one from someone who isn't.
Also if the original OP phone IR they will tell you that you can claim for items used in the business that were bought before the business was started.

So Duncan please explain to me ( i will use ebayer seller for example who purchases from carboots/markets/wholesalers then resells)
If the seller buy 50% of his/her stock from carboots and doesn't get receipts, very unlikely they will get a receipt, but then sells each item bought on ebay, but because no receipt was given the seller cant offset the original cost against the selling cost, therby the seller will be paying tax on the whole sale price rather than just the profit, in lamens terms.....too much tax would be paid.......
Now i never said everything is going to be receipt free but not even HMRC expect receipts for all transactions especially within certain sectors. HMRC would expect receipts for all purchases from wholesalers though

Horace

I am all for keeping receipts - I have a huge wallet full of them - I even keep bus tickets where I have used public transport to get to meetings and have written across them where I went.

I also have an accountant and thankfully her fee is reasonable. I havent long started and have done the groundwork with regards to suppliers etc, I just need clients but they will come especially after I do the wedding fair in September.

pitkin2020

Horace wrote: »

I am all for keeping receipts - I have a huge wallet full of them - I even keep bus tickets where I have used public transport to get to meetings and have written across them where I went.

I also have an accountant and thankfully her fee is reasonable. I havent long started and have done the groundwork with regards to suppliers etc, I just need clients but they will come especially after I do the wedding fair in September.

a good accountant is worth their weight in gold, my first accountant i chose through a large firm and they were useless, 2nd accountant works from home fees are less and is always at the end of the phone if needed, will get back to me with any questions usually within 48 hours if email him. He also saved me 10 times his fee last year alone

duncan303

whooaaa PAX

Horace

pitkin2020 wrote: »

a good accountant is worth their weight in gold, my first accountant i chose through a large firm and they were useless, 2nd accountant works from home fees are less and is always at the end of the phone if needed, will get back to me with any questions usually within 48 hours if email him. He also saved me 10 times his fee last year alone

I have had huge accountancy firms shove business cards in my hands at chamber networking events - I take them all and to be honest some get used as bookmarks (waste not want not:rotfl:). My own accountant works from home and is extremely knowledgeable - she is available at the end of the phone if I want to speak to her and she is worth her weight in gold as I feel sure that she will save me money over the coming months and years.

duncan303

pitkin2020 wrote: »

how can you say if you want an informed educated guess ask an accountant??

opinion then......... nothing more.... oh ok they will take a shoebox of receipts and turn them into a business profile. but isn't that just because people are lazy. Maybe people they think that by hiding behind a cardboard cutout they are protected.
glorified bookeeper.

Rubbish!

only YOU are responsible for your business. and when it comes to the wire its your life on the line. Its not a game. Any true accountant worth thier salt will agree.

I never said I had bad experience with accountants they have their uses, a bit like ready meals in the supermarket. [FONT=&quot]Convenience.

Keep accurate records that is my message. Am I wrong?


i ma going to put a grin here dont get angry




[/FONT]

pitkin2020

lol ready meals like that.
Yes accurate accounting is very important but many people who start out in business are not fully aware of what is claimable and what isn't, therefore they end up paying more tax then is necessary.

In general a bookkeeper prepares accounts for an accountant an accountant generally doesn't sort through your shoebox of receipts thats the job you should do yourself or employee a bookkeeper.

Your business is your responsibility i couldn't agree more and you cant hide behind an accountant, but by having one doesn't make you lazy thats just absurd, if you dont have the skills you employee someone to fill the skill shortage, any business that cant reckonise its weaknesses and fill those gaps with never make it.................

duncan303

pitkin2020 wrote: »

Your business is your responsibility i couldn't agree more and you cant hide behind an accountant, but by having one doesn't make you lazy thats just absurd,
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ok ..............bit outragoues.