self assessment-- Am i doing this correctly

dprovan

Hi all,

I was hoping some of you who are more knowledgeable on these matters can advise if I am doing this correctly.

I am employed and pay tax directly from payrole. I also buy and sell via ebay so am registered as self employed and complete a self assessment tax return for this online. My first trading year was 07/08 and I did this online. I was then advised that I had overpaid by £300 or so, I was never sure why but assumed if I left this they would use it for next tax collection.

I have now just completed my second year online tax return. I have kept books myself, my belief was that my figures are fairly straightforward so thought this was appropriate....

My business has few outgoings.

my figures were sales 35,423
my expenses only constitute 1. purchase of stock, 2. ebay fees, 3. paypal fees, 4. postage fees and they totalled £31,680.

I do not claim for electricity, heating etc as I dont want to complicate matters and I use my home anyway.... So for the purposes of completing this online I tell them about my employed work give what I earned there and what tax I paid. And in terms of self employed I really only seem to fill in two main bits the money in total and the expenses total which I put in the category of costs of goods purchased. This category seemed the most appropriate to include ebay, paypal and postage fees.... Does that sound right?

Anyway after doing all this it advises that i owe about 900... It doesnt seem to give me the option to deduct the 300 overspend from last year. It looks like I need to pay the 900 and ask for the 300 overspend seperately. Is that right?

Does this all sound ok? Somehow it seems too simplistic so am I not doing this properly?

I keep folders for each financial year showing money in and reseipts of stock purchased and ebay.paypal and postage fees. Does it sound like Im in decent shape. Id hate to find in a few months or a few yearts that I was doing all this wrong.

Thank you for any advice in anticipation:beer:

fengirl_2

First of all, you could have recliamed the £300 overpaid from the previous year, but I guess you will now want to set this off against the tax due for 08-09. It wont show up on your tax calculation as each tax year is separate, but the £300 should be lying as a credit on your account and be set off when your actual bill is generated.
Secondly, you need to be including all the costs of running your business in your accounts otherwise you are not making a true return. You need to include the proportion of the running costs of your home relating to the room used for business. I imagine there will also be telephone and internet costs, packaging and travel to the post office. If your return is selected for investigation, things will be more complicated for you as you wont have shown all your costs, leaving the way open for HMRC to challenge your return and, importantly, your turnover.
Cost of goodds purchased only go in that section. Ebay fees, ostage, etc go in running costs.

payless

expenses only constitute 1. purchase of stock,

care - stock purchase it self is not an allowable expense , it should only be included ( in cost of goods sold) if ots sold or wasted

dprovan

Hi guys,

thanks for the replies,

can I also check where to I record closing stock. I could not find anywhere to do this.

thanks again

payless

closing stock would go in balance sheet, which is not compulsory in self assessment

monkeymonkey_3

payless wrote: »

closing stock would go in balance sheet, which is not compulsory in self assessment

Sorry to but in on your thread OP, but wondered if someone could help clarify this for me?

If it's not compulsory to have a balance sheet for self assessment, then how do I go about entering my figure for cost of buying stock and materials? (This year is my first tax return). Do I work it all out with a balance sheet first (using opening stock&materials + cost of stock & materials, less closing stock) and then just enter the total on the self assessment? Or do I not have to use opening and closing stock, and just put down the cost of any stock purchased within the period?

Sorry if I'm asking a silly question, and thanks in advance to anyone that can help.

TM1976

The stock cost is:

Stock purchased in year+ stock brought forward from the previous year - stock balance carried forward

You may not have to provide a balance sheet but you still have to calculate your P&L using GAAP which will take account of balance sheet movements.

monkeymonkey_3

Thanks TM1976, so I was correct in thinking that I just work it all out as a balance sheet format anyway, and then just enter the total figure on the self assessment? I just wanted to check that I was on the right lines. Thanks