I wonder if anyone can help me. . A self employed person with 3 different sources of income. The expenses are few - a few tube tickets and for the year 09 -10 has used their personal bank account. Was told that it will all have to go on computerised accounts with all personal stuff put on as drawings. Year 10 onwards, a business bank account has been set up and used. My question is does all the 09-10 stuff have to go on QB? The income and expenses are so few, wouldn't an Excel spreadsheet suffice? From this their Annual Return can be filled in. Hope I am making sense. Any advice would be greatly appreciated! Really appreciate the advice I get on this forum! Nicky
I can't see the problem with doing this on excel, using it as an analysed cash book. Just make sure all transactions are recorded (personal as well as business) and reconciled and as you state all personal stuff would be classed as taxable 'profit' after the deduction the personal allowance.
Thanks for your reply. This is the bit I don't get and should probably know! Why would I have to record the personal stuff and reconcile it to the bank account. From March 10 they have changed bank account to a business one. Also don't I just need their income figures and expenses so the Accountant can fill in their tax return.
The only way I learn is by asking dumb questions!!
Yes you do just need the income and expenditure for the accountant for the tax return BUT should HMRC decide to investigate all income and expenditure from the personal a/c would need to be accounted for. Once your client has a business bank a/c as well as his personal one you don't need to log any personal stuff, unless he uses the wrong account!!!!
Did the books for years (till he retired last year) for a sole trader who only had the one bank account and his accountant wanted a complete reconciled bank account, also a purchase and sales day book together with invoices and receipts. Obviously not for cash drawn out but anything paid by cheque or debit card.
I guess it depends on whether the accountant was doing a balance sheet or not. If they were, then yes a fully rec'd bank account would be needed, but you can list just the business expenses and then use a balancing figure for the rest as this is private. Obviously you may have to ask about certain monies going in, but surely not about monies going out if they match the receipts.
With regards to HMRC investigating, it may have changed since I last dealt with one, over 5 years ago, but if they wanted to see your bank statements regarding certain transactions, you could actually copy the statement, black out all the non relevant bits including the balance figures etc.. and just leave that 1 transaction showing.
The used to be quite clever is asking for stuff they were not entitled to see in the hope the person would slip up and show to them more info than needed.
