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    • JordyG
    • By JordyG 12th Apr 18, 12:54 PM
    • 2Posts
    • 0Thanks
    Started New Cleaning Business Last Year - Need Help with Tax
    • #1
    • 12th Apr 18, 12:54 PM
    Started New Cleaning Business Last Year - Need Help with Tax 12th Apr 18 at 12:54 PM
    Hi All,

    Im 23 and started my own cleaning business just after the end of the last tax year. I have put down 15th April 2017 as my start of trading date, and registered for Self Assessment this April 8th 2018.

    I was just doing a few odd jobs here and there whist living with parents, then realized I was turning over more than I though it would (still small fry) but enough to become a livable wage.

    My record keeping has been dismal, I have been paying for cash with some things, a couple of different bank accounts for some things, I missed off a few written jobs along the way etc etc, i'm dumb for going into it a bit blinded, but don;'t regret going into this at all.

    I've tracked down as many printable invoices as possible of things iv'e purchased over Apr 17 to Apr 18, such as a pre-owned start up cleaning packaged (jet wash, carpet cleaner, lots of tools etc) which was 3,450 with receipt. my van 1100.00, my business phone bill including redirects 300.00, business marketing 1200.00. I haven't kept all the smaller receipts like my uniform, fuel, milage, cleaning solutions etc.

    My turnover in the first year has been: 15,455.00
    My expenses which I can make accountable is: 6050.00

    So in the first year with the receipts I have available I have made: 9405.00

    Now because i'm in my first year, and have made under the threshold of taxable income, i'd have thought that me not keeping track of all my expenses will not make any difference in what I earn, as either way it would have been under the taxable threshold? and I still wouldn't have made loses to carry onto the next year, so no benefit there really. I have probably not kept receipts for around 1500.00 of materials etc, so profit is more realistically 7905.00.

    Do I just now remain vigilant with record keeping, and not lose too much sleep about me paying for cash with fuel sometimes, then card other times etc, if i am not actually claiming on it.

    Also, when will they write to me and ask me to do my first return? I have signed up for self assessment this week, and not received a self employed tax number yet.

    Also, I have now set up a bank account just for my business, do I have to pay the exact amount of money that is earnt in cash into this account? or should I just pay what I can into it that will keep me covered for business expenses so all the credits & debits are recorded, and the remaining cash I can use to either deposit to my current account, or put into savings, or just spend some as cash?
    Last edited by JordyG; 12-04-2018 at 1:48 PM.
Page 1
    • JordyG
    • By JordyG 13th Apr 18, 2:13 PM
    • 2 Posts
    • 0 Thanks
    • #2
    • 13th Apr 18, 2:13 PM
    • #2
    • 13th Apr 18, 2:13 PM
    i'm aware that I will need to fill in a tax return even though I'm below taxable threshold in my first year. I would imagine I would be over tax threshold second year if things stay stable, as I am not much in need of any heavy expenditure in terms of equipment so hoping for low overheads and many more customers.

    I was just wondering when It would be in terms of what date they will ask me to do my first return, since I only just registered as self employed, 1 year after trading???

    I got an email this morning saying that my self employed tax number is in the post, and should be with me in 10 days. its going to my registered business address with mail forwarding, so would imagine more like 14 days until receipt. Will i be required to submit my tax return right away. Id rather it be out of the way to be honest :-)

    OK, what I will most probably do is pay all my money in to the business account at the end of the month, then transfer what I need to my seperate personal account (bills, food, social etc), and keep the rest in the business account for business credits/debit only?

    Does the tax man go easier on you in your first year, in terms of not investigation etc. I have read of some horror stories of tax investigations where they go over everything with a fine tooth comb in terms of all life expenditure and incomings, not that I have anything to hide at all, but could do without any stress on top of building my business, as ive got a constant headache with a lot of stuff trying to grow this as it is!
    • sheramber
    • By sheramber 13th Apr 18, 5:18 PM
    • 5,595 Posts
    • 4,246 Thanks
    • #3
    • 13th Apr 18, 5:18 PM
    • #3
    • 13th Apr 18, 5:18 PM
    Buy a notebook and keep a record of your visits daily-

    date, business mileage, payment received , On the opposite page note any business expenditure you paid out.

    Also make a note of money paid into the bank and the date it is paid in.

    That way you will be aware of how your business is doing.

    When you need to make up your income/expenditure figures at the end of the year you will have all the information available.

    You will be taxable on your profit , which is your total income less business expenses,

    Personal expenses ( wages) are not claimable expenses. Your profit ,and therefore your personal income, is what is left after you have paid any tax and National Insurance due so make sure you budget for this.

    As you started in April 2017 your first year trading is 2017/18 and you can complete your tax return as soon as you receive it from HMRC or you can do it online as soon as you are registered.
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