First time Self Assessment - A bit over my head - Help!

prezzacc

Hi all,

Wonder if anyone could help, let me firstly say the obvious - Its 95% likely ill be getting an accountant as clearly i have a lot of questions and i know thats the only real way to be sure! I have a couple meetings lined to up, but before this i wonder if anyone could help - probably really silly questions.

I have been online selling (very low scale) for a year and have done little bookepping (i know i know!) So essentially have around 1k reciepts that are all email invoices. First question i know i need to keep these, will a bookkeeper need each in PDF and do i need to save in a PDF - i dont fancy giving out my email password!!

How is the best way to reconcile, do i need to match every bank payment to a purchase as such? I know this is all too late , im learning the hard way, but i will be getting a robust process in place now, likely with software to help me (hence the accountant help coming) 

Lastly if i brought stock BEFORE i started trading , can i claim this? Or only from day 1 of my business being registered with HMRC? 

Many thanks for any help on what probably seem obvious questions!

Jeremy535897

If you are set on hiring an accountant (probably unnecessary if your scale of business remains at that level), ask them what they want. How much they charge will depend on how much you do. If, for example, you write up books using commercial software, you can create invoices in the software. For the past, you can attach your pdf files. Whether you need to record every bank transaction will depend on how you keep the books, and on whether the bank account is primarily used for business or non-business items. Stock bought before starting to trade is brought in on day one of trading at its cost.

tacpot12

Your bookkeeper, if this is not you, will need to see each invoice to get the date and the amount from it. They don't care if it is a PDF or not, just that they can see it. Your email software might be able to filter the relevant emails and forward them in bulk to your bookkeeper. I would suggest that you need to agree that you are going to do this, so that they can setup a filter to move all your emails to a folder with your name (if this is not already something they do for all clients). 

HMRC might as to see each invoice, and will expect you to be able to produce them for the last six full tax years plus the current tax year, so having them as PDFs will help. Your email software might offer a way to save the attachments in bulk. 

You need to reconcile each bank transaction to the purchase that it relates to. The purpose of the reconciliation is to make sure that you have an purchase recorded for payment into the bank account, and that there are no purchases that don't have a payment into the bank account. (One way to think about it is that your bank account represents the real world, your accounting records are a view of the world, the reconcilliation checks that your view of the world accords with reality.) You also need to reconcile all payments out of the bank account - there should be a record in your accounts as to where the money has gone. 

As far as I know, providing you bought the stock in the expectation of trading, and you have kept the invoices, you can claim this as a valid expense of the business. (Your accountant will confirm).