Housing Benefit - Self Employed and refusing to agree Net Profit

Dogger69

How many hours are you claiming to be working on the business, and is it solely based on ebay?

Everything you have said so far on this thread shouts 'compliance investigation'. I would not be surprised if, at some point, TC ask you to justify your activities.

Mermibridg

Poppy9 wrote: »

If your trading year is 1st April 2012 to 31st March 2013 your opening stock is the value of stock you hold on the 1st April 2012.

Your closing stock is the value of the stock you hold 12 months later on 31st March 2013.

Normally for a business your cost of sales =

Opening stock + purchases - closing stock.

So if you hold stock of £200 at beginning of year and spend £400 on stock throughout the year and have stock remaining at year end of £300 then your cost of sales is

200+400-300 = 300

Thank you poppy. So in your example, £300 of stock was sold, that makes sense. However does that mean Cost of Sales is an Expense (rather than an income) or am I still confused?

Michelle

Poppy9

Mermibridg wrote: »

Thank you poppy. So in your example, £300 of stock was sold, that makes sense. However does that mean Cost of Sales is an Expense (rather than an income) or am I still confused?

Michelle

Your cost of sales is £300 as that is the "cost value" of the stock you sold.

I've edited my post as where I think you are going wrong in presenting your information.

Use the form

http://www.northdevon.gov.uk/self_employed_earnings.pdf

assume 1st column is income and second column expenses and ensure you correct identify separately your opening and closing stock and your cost of sales and you should be fine.

Mermibridg

Dogger69 wrote: »

How many hours are you claiming to be working on the business, and is it solely based on ebay?

Everything you have said so far on this thread shouts 'compliance investigation'. I would not be surprised if, at some point, TC ask you to justify your activities.

Hi Dogger,
thanks for reading. No its not just on ebay, I have my own website and a number of very high profile clients across the UK and Europe. My business was originally designed to help out the industry and the amateur, not to make a huge profit as I was running it since 2007 while I was still working the much better paid day job as a financial consultant. However, I did hope the profit would have increased by now. Unfortunately I've been hit by new aviation rules that do not allow me to post more than 1 litre of liquid to Europe which has hit sales somewhat.

I would be more than happy for a compliance investigation, I would welcome it, I have nothing to hide and I can easily break down the hours I work into various necessary activities needed for running a business. Its a shame you're so cynical! Not quite sure what you don't like about my posts but you're entitled to your opinion. I think self employed people should be a little more supported than they currently are!

Michelle

Mermibridg

Poppy9 wrote: »

Your cost of sales is £300 as that is the "cost value" of the stock you sold.

I've edited my post as where I think you are going wrong in presenting your information.

Use the form

http://www.northdevon.gov.uk/self_employed_earnings.pdf

assume 1st column is income and second column expenses and ensure you correct identify separately your opening and closing stock and your cost of sales and you should be fine.

That's brilliant Poppy, that's helped a lot, yes they seem to be missing some figures.. shame the didn't just ask me for them! Thanks so much for your reply (and to everyone else who's read and helped)

Michelle

Dogger69

Mermibridg wrote: »

Hi Dogger,
thanks for reading. No its not just on ebay, I have my own website and a number of very high profile clients across the UK and Europe. My business was originally designed to help out the industry and the amateur, not to make a huge profit as I was running it since 2007 while I was still working the much better paid day job as a financial consultant. However, I did hope the profit would have increased by now. Unfortunately I've been hit by new aviation rules that do not allow me to post more than 1 litre of liquid to Europe which has hit sales somewhat.

I would be more than happy for a compliance investigation, I would welcome it, I have nothing to hide and I can easily break down the hours I work into various necessary activities needed for running a business. Its a shame you're so cynical! Not quite sure what you don't like about my posts but you're entitled to your opinion. I think self employed people should be a little more supported than they currently are!

Michelle

Sorry, I don't think you understand what a compliance investigation involves. The chances of HMRC classing a six year old business as viable with your profit levels are next to zero. Most people make more than you when selling goods as a hobby.

Poppy9

Mermibridg wrote: »

That's brilliant Poppy, that's helped a lot, yes they seem to be missing some figures.. shame the didn't just ask me for them! Thanks so much for your reply (and to everyone else who's read and helped)

Michelle

But it's not them missing figures, it's you - if the information you gave below is how you presented your accounts.:o:rotfl::rotfl: (not having a go but you need to take more responsibility for the correct presentation of your accounts).

Their form is a correct version of presenting accounts clearly identifying Opening and Closing stock.

The staff inputting the data provided to them onto the HB system are not accountants, they are data input clerks with technical knowledge of the HB system. So they see only one figure for stock and will assume it's your closing stock value.

When you speak to/see them, you need to take in your accounts presented in the format of their forms, that way they will understand your figures correctly.

Good luck.

ILW

I would try to do a basic book keeping course.

Mermibridg

Point taken Poppy and yes I agree its my responsibility to provide the correct figures. Unfortunately they only asked for Net Profit and some receipts and some expenses which I provided on my first interview with them back in January. In addition and since I've provided tax returns (which yes I know they don't use) various other invoices and receipts and a 5 excel sheet breakdown of transactions which is over and above what they has so far asked for.

I'm with East Staffordshire Borough Council who don't have such a form online (North Devon and the others were provided as examples and for comparison). They listed out a number of allowable expenses and these match up with other councils but they haven't as yet asked for opening and closing stock figures or I'd have happily have provided them, including a breakdown of them and made sure they match up with stock bought this year etc.

It does sound like that's what this issue is though so now I know I can provide the figures they obviously need!

thanks again

Michelle

ILW

HMRC will also require you to use opening and closing stock figures in your P and L calcs.