Self assessment question about working out

cherrycupcake

It's an easy question, just hard to find someone who knows the answer! lol

My income is A
expenses are B
capital allowance C

so they say A - (B+C) = profit which makes sense, but where do I allow for stock I still have? Do I add it to turnover or deduct it from expenses?

Thanks in advance for anyone who knows!

fengirl_2

Stock on hand is included in your balance sheet.
Your income and expenditure account should only include the cost of stock sold - anything left is carried forward.

cherrycupcake

Thank you very much for replying, but I have to confess to being thick 'cos I don't know quite what you mean. Stock left is deducted from somewhere but I don't know where. It must be because I'm looking at the short paper return I got sent, it must be that the online version 'cos it's longer has more sections. There's nothing in the notes or anywhere that mentions it!

cherrycupcake

I understand what you mean now. Basically anything left doesn't matter because it's still an expense, and any income from it goes on the following year's amount??

I asked on another forum and 2 replies said the same as you, but on my how to do SA tax course they said you have to factor in stock so I did on the previous year (my first time) but 'cos that was 18+ months ago I've forgotten what I did!

Rolo_Tomasi

You cannot include as an expense stock which you have purchased and not yet sold - you only include it as an expense when it is sold. eg. If you spent £1000 on stock and had sold half of it for £1000 by your year end your income would be £500.

zygurat789

The tax return asks for "cost of sales"
Cost of sales is:-

Opening stock (at the beginning of the period)
+ Purchases
- Closing stock (at the end of the period)

The closing stock will also be the opening stock for the next period