tax bill help please

jpwhittle

im not actually paying tax at the moment due to being a stay at home mum but i am hoping to start my own buissness after the birth of my second child in september and am going to spend the next 6 months trying to find out all i need to know about running my own buissness. so i was after some advice from you guys if i could please?

the thing is i need to know do i need to get a accountant or can i do all my books and tax returns myself? the thing is my dh did an accouintancy course at college so said he would be able to do all my books for me, should i get an accountant to sort out tax returns or are they easy enough to do on your own? also what about the tax you are aloud to claim back on things like petrol? are there clear guidelines to go by?

i think that in my first year im being a bit carefull and saying i wont earn the £5000 allowance before you have to pay tax but i also dont want to be running at a loss if i dont make enough to pay the accountants fees. does this make sense? i really want to make a succes of this and not throw myself into something without all the facts.

fengirl_2

Whether or not you employ an accountant depends on how complicated the business is and how well you think you will be able to maintain your records.
I always advise opening a bank account for the business and make sure all the income and expenditure goes through that so you dont miss anything.
You cannot claim back tax on petrol, etc, but you should include in your accounts a deduction for all motoring expenses as this reduces your tax bill. Keep a record of all your business miles as you will have to disallow your private miles in your tax return. HMRC do courses locally which help you with record keeping and tax returns, but you will not find a guide to allowable deductions as all businesses are different and its up to you as the business owner to make sure all your expenses are include in your accounts.

jpwhittle

i agree with the bank account i had already said tonight to dh that i would open an account specifically for the buissnes and try and not touch it except for essentials untill the tax bills had been paid.
the type im wanting to start would invovle a bit of travelling to get to cra fairs and fates and things like that. (although im not going for the usual route of cards ad jewellery) also im thinking of making my work known by doing parties related to my items.
i thought that i would have to do like an expenses thing to be able to claim back petrol costs and thing. as i have read about the tax allowance on petrol. is this for someone who is self employed but works for people like my bil who is a builder? is it different for someone who is effectivilly working as a shop?
soory for all the questions i just want to make sure im in the know so to speak.
i wouldnt say the buissness is complicated its just a craft type buissness.

fengirl_2

First of all, the business bank account will be just that - only for income and expenses of the business. Don't forget that income tax is a personal expense.
You would include in your accounts all your motoring costs - anything connected with the business such as travelling to fairs, going to buy materials and going to the parties you are organising. You need to include everything to do with the car - petrol, oil, insurance, tax, repairs, etc. In your tax return you will add back the proportion relating to privtae use of the car, so you should keep records of private milage.
By including these costs in your accounts you will be reducing your tax bill, but you cannot reclaim tax as you will not have paid any. In reclaiming tax relief on travel, I think you are thinking of an employee who might reclaim travel expenses against tax at the end of the tax year.

jpwhittle

so i wouldnt need an accountant

fengirl_2

It looks as if there will be a lot of cash involved in this business. Make sure that you are properly accounting for cash by banking it all and balancing your cash takings with your float at the end of every day's trading.