total wreck !!! - The Book-keepers Forum (UK)

peapod · Member

total wreck !!!

Shamus · Forum Moderator & Expert

Hi Alison,

I assume that you've got everything set up in order to do the self assessment online? Or probably more relevant that they've got everything set up ready for you to do it for them?

Just try to think of it as your own self assessment.

You say that your friends only just started their business so you need to ensure that the income and expenditure of the self employed business is complete for the relevant period and does not include income and expenditure that should not be included in the period.

You'll be fine. You'll do a lot better than you think that you will. Don't rush anything. There's no time pressure.

Be prepared with all the figures related to the period.

Don't allow your friend to peer over your shoulder whilst your doing it otherwise you'll feel pressured and make mistakes.

Its not an exam. If you're stuck on something the HMRC website is right there for you to use. If you think that you've made a mistake just go back and recheck it.

And always remember that you've got all of us on here if you have any questions. If I'm not around someone like Bill or Rob or Sheila probably will be.

Now forget about it until morning when the new, all singing, all dancing Alison will wow the client with her amazing confidence!

Best of luck,

Shaun.

peapod · Member

Evening Shaun

many thanks for the encouragement,

ive never done a self assessment before its like i have the knowledge but not the experience and i dont know where to start - i have nothing set up as yet and neither does he
he is not in buisness as such just gone self employed instead of being on the books he registered self employed first week in march

i will go to bed and try to think of some sensible questions for you nice people

feeling a bit stupid but we all have to start somewhere

many thanks
Alison

Shamus · Forum Moderator & Expert

Your not stupid. We've all been through it. Just wait till the evening before you visit your first client!

Self assessment is nowhere near as complicated as you're probably imagining it to be. Its pretty self explanatory. Just make sure that you include the right attachments when you do it.

The first step is to get your friend set up for online self assessment.

Not a two minute task as HMRC have to send a code through the post for you to activate it so there's going to be plenty of time for questions!

Set up the account tomorrow but don't expect to be doing the return before mid to late next week.

Now go to bed and forget about it.

Sure that we'll tomorrow. Night Alison,

Shaun.

RobH · Expert

Hi Alison,

You say your friend just started self employment in March. Has he registered for self employment yet? If not he needs to and also to start paying his class 2 nics. Do his accounts for a really short period, ie to 5th April 2010 in order to avoid overlap profits next year. Does he have any capital allowances to claim?

Check for other income, bank interest( If there is any he will almost certainly have paid tax on it), dividends, capital gains, does he own another property he lets out? Just make sure all income is disclosed.

Although this may not be relevant this year due to him only trading for a month, but explain to him how and when tax is paid, let him know that next year he may get a double whammy as his profits will be higher and he will almost certainly have to pay a payment on account in January 2011 and July 2011. So if he has £4k tax to pay, he will actually have to pay £6k including the 1st poa in Jan. Remind him of Class 4 nics, I'm afraid the couple of quid he is paying for class 2every week isn't the end of it! Suggest he makes provision for his tax bill and when he asks how much, let him know there is no set formula but if he puts away say 15 to 20% minimum of turnover he should be ok (remember his effective tax rate is at least 28% of profit assuming he is standard rate payer).

Like Shaun says, it's all pretty standard stuff but just by saying the obvious it gives him confidence and that will spread to you. You won't mess it up, the form just looks scary, especially when they send a helpful manual that is ten times the size of the actual form. You will find you will be leaving most of the form blank!

Good luck,

Rob

peapod · Member

Evening Gents

Well ive had some sleep and done some homework and this is how it looks

i am going to

confirm that he has requested an online tax return if so has he got any letters ect ( i already know he has registered as self employed )
confirm that he has applied for national insurance direct debit CA5601 form
request any info on any millions he may have in savings ect
his p60 for his PAYE info
set up a simple income & expense spreadsheet
request any invoices expence reciepts ect

things i need to know from you guys

if he only worked a few weeks as self employed in march 2010 do we need to fill in a tax return now ? or do i wait untill january ??

he works as a selfemployed carer and travels to many different locations can we claim for fuel as long as he goes to the office first ?? or no fuel at all ??

he often sleeps over can we claim for food ect ??

i think i am getting somewhere and not feeling so worried - i CAN do this

thanks again in advance your help is greatly received

peapod · Member

Oh heck i forgot to ask

peapod · Member

if his payment get paid directly into his personnal bank account do i still need to ask for this
to reconcile

it seems a bit strange to looking at all his buisness ??

thanks

RobH · Expert

Hi,

the latest you can his tax return in is 31st Jan 2011 (on line), 31st Oct 2010 (paper). Theres no mad rush but I wouldn't wait until the last moment.

Claim 40p per mile for teh first 10,000 miles, if he does business miles in excess of this cliam 25p on the miles above 10k.
If you use this method and for people in his type of work it usually is the most efficient way then you cannot claim any other motoring expenses or capital allowances. If he doesn't do too many miles and he has a huge gas guzzling machine, it may be worth claiming the actual motor expenses instead.

Reasonable subsistence is allowable.

There is no legislation saying he needs a business bank account and if he has copies of his invoices then it may not be necessary, but always nice to see the money going in. Of course there may be a timing difference between his invoice going out and the money coming in, so you should accrue that invoice and he will have a debtors figure on the Balance Sheet should you prepare one.

Rob

peapod · Member

many thanks Rob

things are getting clearer and not so worrying as a newby to all this
this site is such a friendly place i will no doubt be popping up now and again

take care
Alison

Lisa Jo · Senior Member

I always have riends asking for help & Ive found it a lot easier since understanding the payroll side, they forms seem daunting but are easy to complete

Ammers · Veteran Member

RobH wrote:

Claim 40p per mile for teh first 10,000 miles, if he does business miles in excess of this cliam 25p on the miles above 10k.
If you use this method and for people in his type of work it usually is the most efficient way then you cannot claim any other motoring expenses or capital allowances. If he doesn't do too many miles and he has a huge gas guzzling machine, it may be worth claiming the actual motor expenses instead.

Rob

Hi,
Can someone clarify the above for me?. My husband does loads of miles for his job and I have always claimed the 40p method..... We are getting a new car for his work in the next few mmonths so can we not claim some of that back as well as his mileage? I'm every so slightly confused now!
thanks
annemarie

Shamus · Forum Moderator & Expert

Hi Anne Marie,

the 40p per mile for the first 10k miles 25p per mile thereafter is reimbursement for the use of your own car. It covers all running costs including petrol, servicing, mot, insurance, etc.

You seem to be mixing up running a company car with the mileage allowance for use of a private car.

I assume fro what you write that up to now you have run a private car but you are moving to a company car.

The situation will now be based on the C02 omissions of the car and will affect your husbands tax allowance two fold as both a car allowance and a fuel allowance.

Many people opt for the 40p/25p route and run their own car rather than face the tax burden of a company car.

Hope that this clarifies matters a little,

Shaun.

Ammers · Veteran Member

Hi Shaun,
yes that has helped...
we were running a private car that he used for work, so claimed back mileage on that. I thought we could claim it as a capital allowance as well... I have a feeling I have opened up a whole can of worms now... I have done our self assesment returns for the past 2 years now and only since I have started studying book-keeping and tax matters etc ( in the last 6 months) that a few things have come to light and I now know I have made mistakes on our returns... for the last couple of years..... oh god... what do I do now....
I wonder if anyone else has had the same thing happen... ie.. completed SA online, started studying etc only to find out they had done them wrong!
I know I have claimed things I shouldn't have ( not massive amounts) but am also wondering if I haven;t claimed things I could of....
I'm not going to sleep now.

AnneMarie

Ammers · Veteran Member

have started a new thread on my query..... don't think its a straight forward as i would of thought..