Accountants- Expenses Analysis - is this required?

jellybeantinker1

post deleted

BoGoF

Sounds like your accountant thought that some expenses were wholly and exclusively for business use and therefore not allowable. Just because you record something on a spreadsheet (or whatever you made) doesn't mean it is an allowable deduction in your accounts. For example some expenses may be capital.

Do you know the difference between capital and revenue expenditure?

jellybeantinker1

Yes I understand the capital/revenue, but just wondered about the expenses analysis

BoGoF

As we can't see what was produced it's difficult to say. Could be accruals/prepayments.......or any number of reasons.

jellybeantinker1

Pre-payments have been mentioned, but there is nothing in the analysis regarding these

00ec25

your accounts must have been prepared on the accruals and prepayments basis - hence you only see a portion of some of them

from 17/18 tax year the default basis is the cash basis

if you don't understand the above jargon then you need to do a lot more reading

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim1092

Carl31

Does your accountant do your tax return? or do you self assess? you would need it for that

jellybeantinker1

post deleted

00ec25

jellybeantinker1 wrote: »

Accountant did it, and the business started in 2017/18 and cash basis was mentioned to me. Now reading the link given it would appear that both have been used due to pre-payments and amount being apportioned into the tax year 2018/19, very confusing to me!

then it would appear the "expenses analysis" is your accountants wording for how the accruals and prepayments have been calculated.

It is not a report that is legally required for accounts purposes, but the calculation must be done if the accounts are filed using the accruals method, not the cash basis .

why your accountant did not use the cash basis is a question you should ask them

jellybeantinker1

post deleted