Help...need to calculate my stock for tax return!

jezabel

HELLO, I SELF EMPLOYED: I AM SELLING BOOKS ONLINE, I STARTED THIS BUSINESS MORE THAN 1 YEAR AGO AND NOW I HAVE TO FILL IN MY TAX RETURN FOR THE YEAR 2008/2009.

I HAVE SOME STOCK (OLD BOOKS) I BOUGHT LAST YEAR, THE ACTUAL VALUE IS £500, I AM NOT AN EXPERT AND I AM WONDERING HOW TO CALCULATE STOCK FOR MY BUSINESS.

SOMEONE TOLD ME IN A PREVIOUS THREAD THE FOLLOWING: You cannot include the cost of stock not sold. You need to make a calculation:
value of stock brought forward plus stock purchsed less stock on hand and this gives you the cost of sales which go into your accounts.

I HAVE STOCK BROUGHT FORWARD FROM LAST YEAR STOCK (£500), I BOUGHT SOME STOCK THIS YEAR THE ACTUAL VALUE IS £1100.

MY ACTUAL STOCK IN HAND IS £475 (BOOKS I HAVE ACTUALLY HOME, SO THERE IS A LOSS OF £25 FROM THE BROUGHT FORWARD STOCK)...SO THE COST OF SALES IS £1125.

MY BUSINESS PROFITS ARE £2200 - £1125 = £1075 THIS IS THE GROSS PROFIT. I HAVE OTHER COSTS OF £90O IN MY BUSINESS (INTERNET, OTHER COSTS)

SO THE £1075 - £900 = NET PROFIT SHOULD BE £175…

I HOPE I AM CORRECT…THANK YOU FOR YOUR HELP…LOZ

TM1976

You should include stock at cost.

Profit effect of stock movement is = cost of stock b/fwd - cost of stock c/fwd

jezabel

tm1976 wrote: »

you should include stock at cost.

Profit effect of stock movement is = cost of stock b/fwd - cost of stock c/fwd

sorry again...what is stock as cost...i think is the actual cost i have paid for the stock...am i right?

So my calculation is not correct?

jezabel

the cost of stock carried forward is the stock I have left home, the stock I need to use as opening stock for the next tax year...correct?

Where I have to put the actual cost of stock carried forward in the tax return form? Is it considered a profit?

thank you liz

TM1976

OK, cost of sales is:

Stock b/fwd £500
Add stock purchased in the year £1125
Less stock c/fwd (£475)
Cost of sales = £1150

By stock at cost I mean you should value your stock at what you paid for it not at what you intend to sell it for.

jezabel

TM1976 wrote: »

OK, cost of sales is:

Stock b/fwd £500
Add stock purchased in the year £1125
Less stock c/fwd (£475)
Cost of sales = £1150

By stock at cost I mean you should value your stock at what you paid for it not at what you intend to sell it for.

thank you for replying me, just to double-checked again:

Stock b/fwd £500
Add the new stock purchased in this year year is £1100
Less stock c/fwd (£475)
Cost of sales = £1125

ok, thank you...the form I have to fill in for the INland revenue is very short as I have really a small business, do you know if there is a specific box where I have to put the value of the stock c/fwd of £475 in the form...thank you again liz

TM1976

I don't know the form but if you are just entering trading accounts (ie no balance sheet) just enter the cost of sales figure and keep the rest as you workings.