Self-employment SA - short version

[Deleted User]

Anyway, been looking and it seems if your turnover is less than £73K you can use short version of self-employment pages.

Looking at the pages and the notes, it seems all they want is turnover, and expenses total - thats it. No mention of creditors/debtors or opening/ closing stock which seems weird.

It seems you can enter figures purely on a cash flow basis. Money in minus money out for expenses.

I was planning to sort out the accounts properly using debtors, opening stock, closing stock etc but it seems I dont have to do this? Is this right?

Thinking about it I guess it all carries forward to next year anyway. i.e. Even if I dont take stock into account this year it will be used next year etc. Same if I dont claim for an invoice recieved this year and paid next year. Not sure it'd all work if you close the business though at some point? Might screw things up.

Anyone know how this all works?

bni

Yes, the information you have to supply for self employment is only the headline figures and no or few details of how you have arrived at them.

However the same general accounting principles still apply to how you derive those figures for HMRC, i.e. the turnover and expenses should be done on accruals basis, which means the date of the invoice/receipt (when income is "earned" or expenses "incurred") regardless of when it is paid or if it still outstanding. If material, only the amount of stock used can be claimed as an allowable expense (so the difference between closing and opening stock). Spending on fixed assets/cars/land etc. can't be claimed as an expense nor depreciations on the same, instead you claim capital allowances (or pay balancing charges on disposals).

I've heard/read that HMRC in the past have granted an informal concession for the smallest of sole traders to use cash basis instead of accruals basis, but only where the difference between the two would be immaterial anyway. Not immediately relevant to your current tax return, but there is an active proposal from the government to introduce 'voluntary simplified cash basis' for businesses with a turnover of less than £77k.

[Deleted User]

I'd heard that about planned changes....

However, if you look at the notes for both short and full versions of the self-assessment pages, the full one contains details of how to work out profit including stock, accruals etc.

The short version does not and just implies that you can enter turnover, expenses on a cash basis and thats it.

Pennywise

You've made the same post, had the same answers, and are now making the same point on three different forums under different user names. I think maybe you should just accept the advice given, which is correct, rather than hoping for the answer you want to hear (which you won't).

[quote=[Deleted User];58774617]The short version does not and just implies that you can enter turnover, expenses on a cash basis and thats it.[/QUOTE]

No it doesn't - have you read the notes referred to on the short version - SESN1 (google SESN1)

In the final paragraph of the first page of the "self employment (short) notes" it clearly says:-

"If you do not have accounts, Helpsheet 222 How to calculate your taxable
profits will tell you how to work out your taxable profit and explains how
that profit is taxed."

Helpsheet 222 explains how you have to adjust for stocks, debtors, creditors, accruals, etc etc.

QED

bni

Unfortunately the same accounting principles apply to turnover and expenses (which is the sole reason they are looking to reform the requirements), you are just not required to supply the detail.

The difference between the full and short version of SA103 is not turnover, the full version is used if you have additional information you need (or want) to report. On the full version, you only need to provide total expenses figures if turnover under £73k and you haven't prepared a balance sheet.

[Deleted User]

Pennywise wrote: »

You've made the same post, had the same answers, and are now making the same point on three different forums under different user names. I think maybe you should just accept the advice given, which is correct, rather than hoping for the answer you want to hear (which you won't).



No it doesn't - have you read the notes referred to on the short version - SESN1 (google SESN1)

In the final paragraph of the first page of the "self employment (short) notes" it clearly says:-

"If you do not have accounts, Helpsheet 222 How to calculate your taxable
profits will tell you how to work out your taxable profit and explains how
that profit is taxed."

Helpsheet 222 explains how you have to adjust for stocks, debtors, creditors, accruals, etc etc.

QED

Ok thanks. Didnt realise there was a limit to what I could post though. ;-)