HMRC - self assessment - paying cash to suppliers HELPP

bbmay

Thank you for such a helpful reply. All money was deposited in the same account. I barely made £1500 on all this. The usual venues, ebay sales were 1 or 2 (I am scared to even say what the venues were). I dont have a problem with paying taxes, its just that I knew myself that I am below the usual threshold of £5000 something but when I calculated the turnover I panicked for e.g. I bought a laptop for £720 and sold it for £799 (minus fees and other charges £50), my profit £29.

I mean dont they use their common sense that if 47k was indeed my income then the balance should be around £40k(ish now), whereas I have the balance of £1500 that I borrowed from mum.

Yes I do have all the sales records, each sale made etc, total amount buyer paid etc.

As you said the accountant will save me some money such as rent/bills etc but the way i see it is that they will charge 30% on the turnover. How would i EVER be able to pay that?

fengirl_2

HMRC is not obliged to use its common sense. The onus in law is on the taxpayer to show that his records and therefore his tax returns are correct. You have no records, or at least very poor records which a horse and cart can be driven through, and thats why I am urging you to take professional advice. if this was your only source of income in the year, HMRC would have further questions like what were you living on?
I am not sure an accountant would charge 30% of the turnover - go and see two or three for a chat about what they might charge - no obligation.

bbmay

No i mean taxman charging me 30% of the turnover thinking it is my income.

blue_monkey_2

That is why you need to find an accountant bb, he/she will help you to put things into perspective. If you have not made any money then you need to prove that you have not made any money. An accountant will help you to get as much as you can straight and because of how long you have left it then it is going to be well above anyone elses head. Sorry, that is just the way it is tbh.

I can understand why you are getting worried but give some of them a call and see what they charge (you might get charged as little as £50 so please do call) but more than anything it will help you sleep at night. See if you can find someone advertising locally rather than someone in a big huge Accountancy office, they will charge you less, but knowing from my own circumstances I claim around 3k pa in rent, rates and utilities so - in theory - you could be finding other money 'lost' on business expenditure and the accountant will help you with this.

Why are you scared to say what the venues were? Was the money legit? Why can't you say - car boot sales? It seems like you have some records so start ringing around and explaining and ask them how much they will charge to get everything in order for you and go from there.

Let us know what they say, OK.

blue_monkey_2

Although you were under the earnings threshold, it is done a little different in the SA form. Under 15k TURNOVER all you need is your cost of sales and your income, over 15k Turnover you need to delare other things such as fuel (you can claim a fuel allowance if you have done business milage in your own car at 40p a mile for example), cost of sales, income and other business expenses.

Because I had worked in accountancy prior to starting my business I found it easy to do as I knew what was expected - I can totally understand that if you had not done it before then it is easy to let things slip by the wayside and then it gets way to big and our of control - as in your case. Go and see someone mate and at least get yourself some sleep at night.

talkinpeace

OP
You have just found the black hole in the black economy.
Somewhere along the line, somebody ends up paying the tax.
In this case it seems to be you.
Rule of thumb for the future,
if bods are selling their own old phone to you, they are not taxable on that so you should not hesitate to get a full cost receipt (duplicate books are good)
if you are buying from a trader and selling through a traceable venue (the internet) why should you pay their tax.......

chappers

I would also advise you to speak to an accountant, he will be able to advise you the way forward within probably half an hour, what you are doing is not illegal it's just about keeping the correct records. I suspect he will say to you to set up a form or something similar that the vendor signs, stating how much you have paid to take on the ownership of an item, he will also tell you to open a seperate bank account.

with your incomplete records it might be worth getting a decent accountant to submit your return for you this year this will give you a bit more clout with the revenue.However when you submit your SA they won't know what records you have, or how you operate your business.Of coyurse they could investigate you, but then again they might not .I went 7 years with out any sort of investigation and then the investigation was only for a particular year.