Self assesment, record keeping etc.

Vickers_2

Hello all,
I'm on a different computer today and forgot my password so i've registered again as another user! (Usually Cullumpster!)

A couple of questions for you self employed bods if you don't mind?

1) My b/f has just registered as self employed last month but his outgoings are more than his earnings at the moment bless him, i know that you recieve a self assesment form at the end of september but will he still have to fill one out if he has only been working for a month?

2) What records do I (notice i said I, as i have been delegated his record keeper Doah!) actually have to keep, sorry i am a bit of a novice at this, i've seen a few people say that they just keep an excel sheet for it but i don't actually know what i am supposed to be recording!!

Can anyone help or pm me please???

Thanks
Vic

heleen

Hi Vic

Here are my 2 cents:

1) unfortunately you need to fill in tax returns for whatever period it is. I'm unfamiliar with self employment but isn't that an April-April year as well?

2)
I keep Excel spreadsheets and they have served me well, basically one sheet for revenue, one for expenses and one for tax payments (and then one for detailed VAT).
REvenue: date of invoice , who invoiced to, how much net, how much gross (=(incl VAT if you need to), whether received paymetn or not and date it features on teh bank account.
Expenses: Date, what kind (e.g. stationery, travel), any comments, amount excl Vat, amount incl Vat
Taxes: PAYE payments and VAT payements made, reference number, what period they're for and what date it's on teh bank account
VAT: I have small business VAT so just keep track of invoiced in the period and multiply by 13% to know what to pay.

Hope this helps

Heleen

WHA

If he has started self employment between 6/4/04 and 5/4/05, he will have to complete a self assessment tax return for the year ended 5 April 2005, on which is declared his self employment profit/loss, AND everthing else for the full year, i.e. wages, interest, dividends, etc.

The deadline for the submission of the tax return will be 31/01/06, which is also the date of payment for the first load of tax he will have to pay (assuming profits made). If he wants the IR to calculate his tax liability, he will have to submit his tax return by 30/9/05.

Remember, though, that the IR only "calculate" the tax due, based on the tax return disclosures - he has to put the right figures in the boxes on the tax return in the first place - he can't just give the IR his accounting books/paperwork etc and expect them to calculate his business profits.

bridiej

Yes, Excel spreadsheets serve me well too!

I have one main spreadsheet and split it into different pages - one for expenditure from bank, one for petty cash, one for car expenses, one for utlility bills (I work from home so get a percentage of these included) and one for income. Also have one for expenditure on credit card as it is a personal card, not a business one.

My accountant seemed happy with it last year.

Oh, and remember to file your actual paperwork in a lever arch file in the same sections as the spreadsheet and in date order - makes it much easier to work out in April!

Hope this is useful...

Poppy9

For miscellaneous small cash purchases carry a small envelope with you with the month written on the front. Whenever you buy something put the receipt in it straight away. At the end of the month record all these cash payments.

For a sole trader you don't need to record so much detail in your spreadsheet. Just the cheque number, company name, amount and date will do. See my posting on Bookkeeper about columns to draw up profit and loss.

Home bills is usually limited to 10%. Anymore and it will affect your home insurance as they will say you are using it for business purposes.

Slinky

I'm thinking of setting up a small publication business running it from home. Don't know whether to go down the self employed or Ltd company route at the moment. Would the self employed or Ltd company status make a difference as far as my home insurance company are concerned does anybody know? Would it make a difference for CGT on the house purposes?

Also if I were to go Ltd company, could I have the phone in my own name yet get the company to pay the phone bill in full or part?

MillwallSue

If you become a Ltd compnay your accounts and records have to be kept absolutely spot on - and any bills have to be made out to the company name not yours, especially if you are VAT registered. If you have no experience of book keeping employ a book-keeper. Beleive me, you won't want to be worrying over something that you are not interested in and is when accounts generally get in a mess (I am a self employed book-keeper by the way!). Another tip is that you need to know double entry book-keeping to be able to understand computerised accounting packages so that you know entries are being posted to the correct part of the accounts.

Keep absolutely every receipt you get - far better to have more than you can use than not enough and then have to pay Mr. Brown tax that you needn't. As a book-keeper this infuriates me intensley when clients don't get/keep their VAT receipts!!!Grrrrrrr. Unnecessary money on a plate! If you are 'trading as' then set up a separate bank account and use this solely for business. Please don;t mix up personal with business expenditure as this becomes really messy. Any money you pay in to your account should have an invoice detailing customer name, address, services provided, total amount if non VAT registered and net, vat and gross elements if you are. It is the money coming in that the Inland Revenue will look at first in if they decide to pull your name out of the hat to do a spot check on. Same with the VAT man.

As well as a book keeper you will need an accountant (book-keepers do the day to day stuff at a far cheaper rate than accountants) but an accountant will know all the ins and outs of tax and VAT and a good one is worth his/her wright in gold!

I'm tired and beginning to ramble and probably not make sense so am off up the wooden stairs to the Land of Nod Hope I've helped!

bridiej

Hi Millwallsue

I dont agree that you necessarily need a book keeper - a simple Excel spreadsheet clearly showing money in and money out, plus petty cash etc etc etc and a file with the papers neatly filed in date order is sufficient.

An accountant is certainly a good idea though, and worth investing a few quid on a decent one as they'll be able to save you a few bob!!!

johnllew

This IR leaflet may be helpful: SABK4 - Self Assessment - A general guide to keeping records.