I would like to make sure that I am doing the right thing, so I would like to inquire about the steps on completing a tax return for a sole trader courier:
1. Attach the receipts to the bank statements as proof of income and expenditure
2. Calculate the sales figure for the year
3. Calculate the total allowable expenses for the year
As the fuel needs to be apportioned between business use and personal use of the vehicle, is there the same point with the other expenses like service, courier insurance?
4. Prepare the Income and Expenditure Report
5. Complete the tax return on the basis of these figures.
Q:
Is there something else that I have missed ?
Do I need to prepare a balance sheet as well ?
Is this procedure compliant with what HMRC expects to see if they make an enquiry?
Thank you,
Have a lovely day !
Adrian
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This is just my personal opinion. Advice should be sought from a suitably qualified Accountant.
P.S. I only ride a motorbike because I want to dry my clothes faster
1. You have have to attach the two but keep together yes... 2. It wouldn't technically be 'sales' more 'invoicable income' 3. Correct. -intermission- Yes you would need to apportion the use and fuel, but the courier insurance, no; That is as far as I know (correct me if im wrong anyone) is wholely allowable as he needs that to carry out the work. 4. Yes compile a P&L 5. And yes, remembering to ADD back in any non-allowable expenses, and making use of the AIA/capital allowances to deduct.
and 6. not really no, if the client doesn't want it and he's only a sole trader then dont bother, its up to you. And as long as either you or the client keep the accounts (inc ALL paperwork) for 6 years then you'll be fine!
Choose a percentage apportionment, and use it for everything for the car, fuel, tax, repairs, services, tyres,e tc etc.. as its shared use... if the use is SOLELY for the courier side of things then allow 100% (ie that courier insurance)
I think it is extremely hard to estimate a proper figure. What would you recommend, as I think this situation is very common in practice. 10, 20, 30 %. usage ?
I`ve worked out the travel from and to place of work and it gets about 16 %. But sometimes the bike is used on the weekend too. So it will add up around 20 %. Is this a normal quotation ?
Sorry for multiple questions. :)
Adrian
__________________
This is just my personal opinion. Advice should be sought from a suitably qualified Accountant.
P.S. I only ride a motorbike because I want to dry my clothes faster
1. Claim a % of all motor costs. Up to the client what they claim as business %. At the end of the day they need to justifiy should HMRC ask.
2. Claim business mileage at 45p per mile for the first 10k miles and 25p per mile thereafter.
If this is their first year calculate both and see what gives the largest deduction and use that going forward. If not the first year then use whatever basis they have used before.
I realise this is an old thread and it's probable that Mark was referring to cars, but the mileage allowance for motorbikes is 24p a mile, not 45p a mile.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
