Self employed accounts and records

GlynD

theesel1994 wrote: »

DO NOT FOLLOW THE ADVICE IN THIS POST. I have got to say this is the most ridiculous piece of advice have ever seen. I can only assume this is a sarcastic post.

What on earth do you mean? I've had three VAT inspections in 10 years and every VAT inspector said exactly the same thing.

IF IN DOUBT ASK THE VAT OFFICE, instead of criticising well informed advice.

GlynD

steve1980 wrote: »

VAT threashold is £73,000 not £57,000.

I hadn't checked that before I posted. I agree, it is now £73,000. You'll have to forgive me, I'm not trading anymore.

theesel1994

GlynD wrote: »

What on earth do you mean? I've had three VAT inspections in 10 years and every VAT inspector said exactly the same thing.

IF IN DOUBT ASK THE VAT OFFICE, instead of criticising well informed advice.

Well informed advice?
Yes, you can go back and claim the VAT - on certain expenses - but not on everything. You can't claim the VAT on the items you have since sold. I seriously doubt a VAT inspector would tell you that you could reclaim VAT on a new bathroom or kitchen because customers visited your home. If you're lucky you may be able to get away with apportioning the VAT based on how much the room was used for business purposes and how much for private. If inspected you would have to produce records on how you came to this figure. If it was for genuine business use there wouldn't be too much of a problem but it might become a problem if you are just claiming because of "some" use.

Those three VAT inspections you had - did YOU put in a claim for a new bathroom or new kitchen and the VAT inspector allow it? You're right about the getting advice from the VAT office - and get that advice in writing.

GlynD

theesel1994 wrote: »

Well informed advice?
Yes, you can go back and claim the VAT - on certain expenses - but not on everything. You can't claim the VAT on the items you have since sold. I seriously doubt a VAT inspector would tell you that you could reclaim VAT on a new bathroom or kitchen because customers visited your home. If you're lucky you may be able to get away with apportioning the VAT based on how much the room was used for business purposes and how much for private. If inspected you would have to produce records on how you came to this figure. If it was for genuine business use there wouldn't be too much of a problem but it might become a problem if you are just claiming because of "some" use.

Those three VAT inspections you had - did YOU put in a claim for a new bathroom or new kitchen and the VAT inspector allow it? You're right about the getting advice from the VAT office - and get that advice in writing.

If you use your kitchen to prepare tea/coffee or meals for customers.
If customers use your bathroom.

This information was given to me by successive VAT inspectors and one made me dig out the receipts for my new driveway to include the cost in my return.

As far as kitchens and bathrooms are concerned, I never claimed for a kitchen but I claimed for a bathroom and it was allowed.

It may well be down to the VAT inspectors opinion but it is acceptable.

pipscot

GlynD wrote: »

I can recommend Sage Line 50 Accountant Plus. It takes a day or two to get to know it but it's double entry and can be read by most accountancy practices which will save you lots of money.

I would think this would be way over the top for a start up business! (plus it is very expensive). Double entry is not necessary for simple businesses.

The simplest thing to do would be to simply use Excel spreadsheets
(e.g. 1 page for income, 1 page for expenses). This would be suitable for very small businesses that use the short tax return format.

If you want to move up to keeping a business bank account and reconciling it from the statements and you have business assets, you could use VT cashbook which is free, easy to use and recommended by accountants -
http://www.vtsoftware.co.uk/
http://www.accountingweb.co.uk/anyanswers/sage-or-vt

GlynD

Excel spreadsheets are more time consuming than using a bespoke package. As your accountant will tell you there is a saving to be had by providing completed accounts in Sage format.

Ok there are two schools of thought but if you start doing things the way your accountant recommends then you'll find life gets easier.

glider3560

I certainly don't plan turning over enough to need an accountant!! An Excel spreadsheet seems like an easier option - I have a spreadsheet for everything else anyway!

Does anyone know the answer to this? I can't seem to work it out from HMRC's website:

Class 2 NICs: £2.50 per week, exempt under £5315
(What if I don't know about earning over £5315, can I claim a refund at the end of the tax year?)

GlynD

glider3560 wrote: »

I certainly don't plan turning over enough to need an accountant!! An Excel spreadsheet seems like an easier option - I have a spreadsheet for everything else anyway!

Does anyone know the answer to this? I can't seem to work it out from HMRC's website:

It is always best to have an accountant. Let him worry about your questions. He doesn't charge you for meetings, just for preparing your accounts and you can phone him and ask him little things. In your case you sound as if you're talking just a few hundred pounds per year which you claim back as expenses anyway.

I can't remember what the contributions were and I'm not sure what the situation is on claiming them back but for tax you pay in arrears (up to two years). Your first payment is in December (paid by the end of January) and your "balancing" payment is in July. This is money which is taken off your next years bill.

lijaloo

glider3560 wrote: »

I certainly don't plan turning over enough to need an accountant!! An Excel spreadsheet seems like an easier option - I have a spreadsheet for everything else anyway!

Does anyone know the answer to this? I can't seem to work it out from HMRC's website:

You can't claim back the class 2 national insurance contribution once paid, however you can claim a small earnings exception if you expect your earnings to be beloe the threshold You might want to pay though as they count towards your state pension (as long as the goal posts donlt move again) and they are cheaper than class 3 (voluntary)

I keep my own records (and those of my husband and several other sole traders) using excel spreadsheets. Much easier and cheaper than Sage. Don't bother with an accountant unless you really need to and I'd also avoid VAT registration unless its really necessary.

glider3560

lijaloo wrote: »

You can't claim back the class 2 national insurance contribution once paid, however you can claim a small earnings exception if you expect your earnings to be beloe the threshold You might want to pay though as they count towards your state pension (as long as the goal posts donlt move again) and they are cheaper than class 3 (voluntary)

So I'm assuming that if I work full time (and pay Class 1 NI in this job) but earn less than £5315 in SE, then it would be better to apply for the small earnings exemption?