First end of year as self employed

allan1983

Hi guys,

as April fast approaches i now await my first self assessment form arriving.
I have an accountant in place (although ive not spoken to her for almost 12 months!) but just wanted to check a couple of things and hoped someone here would be able to advise.
Im a self employed dental therapist, and as such work in several practices. Some pay by bank transfer, others by cheque. for the majority of the time I dont give/receive invoices, as my fee is quite simply hourly rate X hours worked. Do I need to have invoices to prove my income? (all money is paid into the same account and I have statements to show this)
Also, the only 'expenses' I have as far as I can think are fuel and professional subscriptions. For fuel I have paid at all times on a debit card linked to the same account as my income goes into. I dont have receipts for each time but can show proof through my statements. Im hoping this is OK?
(I never even had the option of a receipt for professional subscriptions)
So simply:
Am I ok with bank statements rather than receipts for fuel?
Do I need invoices for income?

Presumably to someone in the know these are simple questions, but I have less han no idea of what im supoosed to be doing here!!

Thanks,

Allan

Savvy_Sue

Personally I think that your statements should be fine for proof or purchases, BUT really it's your accountant you need to ask.

As for the invoices, how hard would it be to produce these if required? You don't have to submit them to the companies. Although I'm surprised at them not requiring an invoice - is there a timesheet or similar to link what they're paying you to what you've actually worked?

chrismac1

You may get a different take on this from your accountant, but here is my approach:

1. For clients like yourself, I set up invoices and customer names and addresses in my system, which take no longer to do. They are sequentially numbered, and I eyeball you to see if you blink when asked "Is this a complete income record?" Without a system like this, how do you answer that question if posed by HMRC and - typically - backed up by "We think you made £10k more sales and hence we assess an extra £2k."

2. Receipts are better in all cases, but there have been a few cases in the past few years where there was poor receipt keeping but decent other evidence, and HMRC lost all those cases.

You will have other expenses you can claiim, such as use of own home, telephone, protective clothing and so on. Your accountant should be able to sort this.

If your mileage is significant, you should be interested in a couple of recent Tribunal cases involving doctors who were doing on call work and claiming home to health centre mileage - as 2 of my clients do. HMRC argued that the health centres were their places of work. HMRC lost because the doctors could show that some of the tasks - such as report writing - were being done from their home. I have now put on record exactly what tasks are being done at home for every client I have in a similar position.

Going back to the sales invoices, this is your key risk. One of my doctor clients formed a limited company, in addition the health centres routinely mucked up the payments - paying incorrect amounts, or paying them into his personal bank. Without sequentially numbered sales invoices, we'd have a job defending ourselves against a claim that lots more was being paid into personal accounts we weren't showing. This is the way HMRC punters' minds work.

allan1983

Thanks for the responses guys
I can get invoices if need be, chris what do you mean about them being numbered? Sue if they dont need to be submitted to the practice is it just a bit of paper (overly simplified!) With the hours ive worked written on? I have records of all my hours from the various jobs, i had to because my hourly rate is different in different places so i would have got too confused!! Believe me I have no intention of fiddling the system but im paranoid about hmrc thinking I am!
As for other expenses I can claim for, im very much hoping the accountant will work her magic there!

chrismac1

On HMRC's latest scheme for fleecing hapless victims - Business Record Checks is the formal name - two aspects are being flagged up in the accountancy profession:

1. Completeness of income - so if invoice 455 is followed by 457, HMRC jobsworths can assert that 456 was for £5k. if there is no sequence they can assert whatever they can dream up.

2. Mileage - some clients I have had for over 3 years who do over 10,000 miles per year still have records which are not much better than "roughly 12,000 business miles". I raise it as an HMRC risk every year and they ignore it, the smart ones have at least come up with something more credible than that.