Mystery Shopping Thread 25 *PLEASE READ THE OP FIRST**PLEASE NO CLIENT NAMES OR FEES

Big_Graeme

Cybi-Ping wrote: »

Do they run the courses online or in person? I found this official HMRC video on youtube http://www.youtube.com/watch?v=Als7oyi5slg

They do both, I tried to find some info but the HMRC site isn't the easiest to navigate, I understand there are some on demand streams and some they do live.

Sunny_spell

Could someone help me please with calculating the total income. I have completed a visit with purchase. I had to buy vitamins £6.75 (as required) which I can keep. I got a payment which included reimbursement plus a fee for the visit. I did not drive so no mileage expense. Do I need to include £6.75 reimbursement in my total income?

skivenov

Personally, I take a judgement call.

If I purchase something that I've got no use for (suppose I never take vitamins), I just put it across the book as a revenue and equal expense. Then I put a note in my book of discarded, donated, whatever.

If I purchase something that I'll use for the business (my preferred course where possible) eg batteries for the camera, stationery), I do about the same and note "retained for business".

If I buy something I'd normally buy (suppose I normally buy vitamins in this price bracket), then I put it down as a benefit in kind for the retail price. For example, I do a slapper queue count and have to put something through the till to get a receipt, I'll buy a bottle of milk and pay the 30p (ish) tax.

If I buy something I'd use, but at a higher price than I'd normally pay (eg, suppose I'd normally buy generic vitamins for £1 from a supermarket, but the purchase was £2 for a brand at a specialist shop), then I book a percentage eg a pound expense, a pound benefit in kind.

Yes, I'm aware I could claim more, and it is a bit of a complicated way of going about things, but there's no point penny pinching. If you're having to penny pinch to make a job worthwhile, I'd argue that there's no point doing the job, unless you're taking it as a training exercise.

Big_Graeme

Sunny_spell wrote: »

Could someone help me please with calculating the total income. I have completed a visit with purchase. I had to buy vitamins £6.75 (as required) which I can keep. I got a payment which included reimbursement plus a fee for the visit. I did not drive so no mileage expense. Do I need to include £6.75 reimbursement in my total income?

Yes but you also add the £6.75 in as an expense so you only pay tax on the fee. The vitamins were a condition of you doing the job and there for a legit expense for tax accounting.

Sunny_spell

skivenov wrote: »

Personally, I take a judgement call.

If I purchase something that I've got no use for (suppose I never take vitamins), I just put it across the book as a revenue and equal expense. Then I put a note in my book of discarded, donated, whatever.

.

Big_Graeme wrote: »

Yes but you also add the £6.75 in as an expense so you only pay tax on the fee. The vitamins were a condition of you doing the job and there for a legit expense for tax accounting.

Thank you very much for your help. I will be donating vitamins as they are no use to me, and I only had to buy them as they were the first recommended product.

skivenov

Personally I would be aiming to increase my earnings as quickly as possible, or call it a hobby.

However, until this happens, it's not unreasonable to argue that you are using the low-paid assignments as a training exercise, and training expenses are, after all, tax deductible.

I wouldn't personally be inclined to ask for a tax rebate, but declaring no profit, and thereby nothing to pay, shouldn't be a problem.

But you've got a quarter year til the end of the tax year, so get on and make some money!

Macadamia

banjobob59er wrote: »

.... at the moment ( on paper) my expenses out weigh my income. .....will the tax man accept this.

I think this happens to all of us at times. I rarely bother doing tax calcs until tax return time, and by then, because of averaging out, I am usually in (small) profit.
But I talked with my accountant about this the other day. If you are self employed, submitting records that show you have effectively made a loss may simply mean your income is not high enough to pay tax. I was told it is not an issue if your sole activity is loss making but the tax man takes a dimmer view if you are involved in two or more different activities, and the others make a profit. They are skeptical, and may judge you are using the loss making activity (in this case MS) to artificially reduce tax liability.

Larac

skivenov wrote: »

Personally I would be aiming to increase my earnings as quickly as possible, or call it a hobby.

However, until this happens, it's not unreasonable to argue that you are using the low-paid assignments as a training exercise, and training expenses are, after all, tax deductible.

I only do the low paid jobs if they fit with other assignments in the area and can spread the travel costs across all the jobs. I also do jobs where I am travelling somewhere for a particular purpose anyway and don't claim the travel. For example doing a Diy store on the way back from the school run.

Big_Graeme

skivenov wrote: »

But you've got a quarter year til the end of the tax year, so get on and make some money!

And a year before any tax is due. Remember your financial year and the tax year are two different things too.

No one expects a business to be up and running and profitable right away and the taxman is no different, you need to build contacts and experience, you may have equipment to purchase.

Buy if you are doing low paid jobs and making a paper loss for other reasons (I'm not suggesting you are BTW, we have a couple here do do that) then HMRC will get you in the end.

JohnnyG

banjobob59er wrote: »

Sorry to be a pain with these tax questions. I am keeping a database/records of my income and expense for MS and at the moment ( on paper) my expenses out weigh my income. I have only been MS for a few weeks. I have completed quite a few jobs and it appears on paper that I am making a loss particularly with the low paying shops. Is this normal. The factor that makes it appear like this is the mileage allowance when added together is more than the payment. Can I submit a negative tax return and if I do will the tax man accept this.

I started in Jan 13 and, when I submitted my first tax return, I had made a loss of close to £150. I submitted this and never heard anything from the tax man. The only tax I had to pay was a higher tax bracket payment from some savings.

This FY, so far, I have made a very healthy profit from MSing so will clearly have considerably more tax to pay.