With regard to accounting software some produce year end Profit & Loss Reports All is fine providing all information is supplied by clients . I have a particular enquiry where the sales are all provided but the expense invoices are not. I have a situation where a friend has lost his Purchases invoices relating to materials. therefore i have a gross profit percentage of sales as 93 % which is a ridiculous figure. As i submit simple self assessment returns usually under the £ 15000 turnover which enables me to submit a modified return. How do i get around this missing information. As i dont think the Inland Revenue Like Estimated figures do they. Is it also possible to include a portion of telephone, Heat & Light and a small cost of the use of a room at home.
There are a few questions here but i would be grateful for any assistance thankyou.
Not sure about your first question, except that I would suggest speaking to HMRC about this !
In answer to your second, yes you can claim either a percentage of your overall bills or set a weekly figure of between £3 - £8. If you look at the HMRC website, not sure of the exact page, but search for self assessment, I think there is a link which details what you can claim against use of room as office - there are a few `case studies` which they have noted which hopefully will shed more light on the subject.
Maybe another forum member will know more about your first question.
Regarding the your first question I would either try and trace the material payments from the bank statements, or if invoices were paid cash ask your client to obtain statements from his suppliers. If neither of these are possible then you will have to estimate the expenses, but this will need to be entered on your clients return as being estimated. You may want to include a note to this effect but as you rightly state, HMRC will surely look further into this which could cause further problems.
This is a problem I used to get when I worked for an accountancy practice. The worst offenders are CIS subbies. My Boss used to say that there is no legal requirement to have receipts to back up the accounts. He used to make us sit down with the client and extract from him/her the expenses, ie Mobile, landline, PPS, fuel,safety clothing, tools etc. Some of these can be supported by bank/credit card statements, the rest can't. Once we had got this information, we typed it up and got the client to sign it as "A true reflection of expenses incurred in the performance of their work" For house/office usage, we used a flat rate of £750 per annum. It was easier than working out percentages. Don't forget when working out phone and fuel/mileage costs to add back for private use(usually around 20/25%) and show the add back on the S/A return. I did this for the 4 1/2 years I worked for the practice and we never had a query from HMRC.
