Tax Return time looming....

Strapped

Rhymsta wrote: »

So the tax man IS interested in my stock ....
I will also make full use of 'lower valuation' rule ie: If you buy a hundred widgets at £5 each and Widget Mark 2 comes out then the value of your stock would fall accordingly.
There is also lots of stuff in job lots that goes straight to the charity shop / recycling / rubbish bin!

Strictly, he's interested in the cost of goods sold.

techspec

Rhymsta wrote: »

Yes, exactly, this tax year finishes in April and at that point or soon after you need to know how you stand. How can you do a stock take six months after the end of the tax year?

You don't do a stock take for a tax return. Sounds like your claiming the price of the goods each year - lowering your tax for items already claimed in prevoius returns.

Strapped

lindseykim13 wrote: »

I'm not sure i'm following this and i've been running my own ebay business for sometime now. If i have spent x amount on stock from april to april i don't count it again when i look at what stock i have left.

What did you spend this year in total on stock, enter that amount. Plus usual ebay fees/paypal fees.

How much money have you made-enter that amount.

The stock you have in your garage or whatever has already been acounted for in the first calculation.

If i buy some stock, i come home and enter it into my spreadsheet, the stock doesn't have to have sold within this year. I'll just sell it next year.
Think you may be over complicating it.

This is not correct I'm afraid. (Although there are proposals at the moment to start allowing this type of accounting, ie on a cash basis, for very small businesses in the near future).

In your accounts the aim is to give a "true and fair" picture of your affairs. So if you made £x selling a bunch of stuff during the year, then to calculate the "true" profit, you may only deduct the costs associated with those goods that you sold*. You can either tot these up through the year, or use the method above that macfly describes to calculate it. HTH.

*and these costs include any "wasted" stock eg damaged stuff in mixed lots.

Rhymsta

techspec wrote: »

You don't do a stock take for a tax return. Sounds like your claiming the price of the goods each year - lowering your tax for items already claimed in prevoius returns.

If I don't do a stock take how do I work out my opening and closing stock figures? Am I missing something....

lindseykim13

Strapped wrote: »

This is not correct I'm afraid. (Although there are proposals at the moment to start allowing this type of accounting, ie on a cash basis, for very small businesses in the near future).

In your accounts the aim is to give a "true and fair" picture of your affairs. So if you made £x selling a bunch of stuff during the year, then to calculate the "true" profit, you may only deduct the costs associated with those goods that you sold*. You can either tot these up through the year, or use the method above that macfly describes to calculate it. HTH.

*and these costs include any "wasted" stock eg damaged stuff in mixed lots.

Yes but to be honest i would have a very small handfull of stuff that i hadn't listed in my stash and would more likely not have cost more than £20! I don't make enough to pay tax so don't tend to worry too much about it. Just a bit of pocket money

lindseykim13

Rhymsta wrote: »

If I don't do a stock take how do I work out my opening and closing stock figures? Am I missing something....

Unless your turnover is quite big in which case i'd assume an accountant would be needed. Then i would guesstimate if you insist on doing one.
I've never entered an opening or closing stock figure-just total in's and total outs. Never been an issue.

techspec

Rhymsta wrote: »

If I don't do a stock take how do I work out my opening and closing stock figures? Am I missing something....

Where on a tax return does it ask the value of all your current stock?

You should be keeping a track of money out and money in as you go along.

davec1960

OP is getting conflicting advice. Is this because some of the advice is relevent to a company where stock is an asset?
The OP is asking about filling in a tax return and "other income" which suggests he does not trade through a company.
HMRC guides advise him to enter earnings less relevent costs so that is what he should do.

Knowing his stock value at the start and end of the year will allow him to work out how profitable his ebay trading is.

chemical.galaxy

I asked the same thing last year - see this thread... https://forums.moneysavingexpert.com/discussion/3883813

Rhymsta

chemical.galaxy wrote: »

I asked the same thing last year - see this thread... https://forums.moneysavingexpert.com/discussion/3883813

Thanks for that - a year on and still lots of disagreement...

Wonder if Martin or someone from MSE could get someone from HMRC to post on here to give a definitive answer?