Hi Lyndsey,

the general rule is disallow when seperable. If they are too intertwined as in the case of sole traders then such is allowable to the extent that effort expended upon non business elements of the return are minimal.

For reference see : http://www.hmrc.gov.uk/manuals/bimmanual/bim46450.htm

p.s. amended to add reference to the relevant BIM.

See also EM9010 and tax bulletin 37.

Quote :

"It is the practice to allow, in computing profits assessable under Case I and II of Schedule D, the normal accountancy expenses incurred in preparing accounts or accounts information and in assisting with the self assessment of tax liabilities".

Not of course to be confused with preparing directors personal self assessments which are not allowable expenditure.

I think that the issue with this thread is that we are casually referring to incorporated and non incorporated entities interchangably where they are quite different so matters are being a little confused.

abacus12345 wrote:

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I am in agreement to disallow firstly. However if one only has trading income, and a self assessment being a product of being self employed I can see where there is to be confusion. Directors definitely disallow.

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Director rents a house out, so the charge I make is primarily made up of assessing rental profits, which I've always included it as a cost of rental. 

abacus12345 wrote:

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Yes.

 

The thread was in connection with sole traders

-- Edited by abacus12345 on Saturday 5th of March 2016 07:55:59 PM

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 Was it?

threads always go off at tangents anyway

Aww come on Johnny. Where does it state self employed? Have I missed something was all I was wondering!!  Show me where Ive missed it.

abacus12345 wrote:

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some kind of double act?

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lol.  Just been on here for a long time!  Although .........some double acts have made some considerable amounts of money out of it...... but I reckon you lot on here would suggest we dont give up our day jobs.   But here's a few suggestions - personally I see myself as Ginger as Ive done tap dancing including teaching level.  Guessing that Shaun is no Freddy though!   Come on Shaun - do tell - can you dance?

abacus12345 wrote:

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I assume you see my advice / answers to others as being incorrect? 

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I don't see that in Joanne's posts.

Reading around discussions that you and she have been part of I am seeing healthy discussion and only through that can people hope to extend and reinorce their knowledge bases.

Would you not rather be challenged on a point and need to further investigate it than people blindly accepting a statement that may or may not be flawed? I know that in the past I have learnt from being challenged on statements (a discussion on Red Diesel with Bill (Wella) comes to mind).

I have seen no thread where anyone has disagreed with you disrespectfully. Only threads which have ventured into extended respectful discussion.

I don't want to see this disagreement going down a one way road where professional working relationships on here are compromised. Both of you are respected site members who go that extra mile to reference regulations when making statements. You are both the sort of contributors the site needs.

Now, discussions with myself on the other hand are a little different in that our discussions have an undertone of disagreement of political ideologies which is a more fundamental difference so discussions such as the directors NI go beyond the regulations and into capitalist vs socialist beliefs.

That doesn't mean that I do not respect your arguments (even though they are wrong, lol)) but it does mean that we are more likely to disagree where there is an ethical or political element to a discussion.

If it was a case that you were in any way being victimised on here I would do something but all that I am seeing in all threads that you have been involved with is constructive discussion with the possible exception of discussion with myself as noted above due to our opposing political stances and even those are done respectfully.

Ok, lets knock this arguement on the head before it gets out of hand and get back to discussing tax regulations and financial reporting standards

Will chat again later.

All the best,

Shaun

Leger wrote:

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abacus12345 wrote:

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I am in agreement to disallow firstly. However if one only has trading income, and a self assessment being a product of being self employed I can see where there is to be confusion. Directors definitely disallow.

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Director rents a house out, so the charge I make is primarily made up of assessing rental profits, which I've always included it as a cost of rental. 

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Morning John,

I can see your arguement of seeing the self assessment as a cost to the rental business (not the limited company) However, the director is reporting their personal tax position from all sources so why should the rental business suffer that burden of that?

If a cost cannot be allocated unquestioned to a source then it must be personal expenditure so in this instance I am with Joanne and Johnny in that if the self assessment is being charged for it should be dissallowed.

That should change though when tax simplification for trivial benefits is introduced as are not benefits up to £300 per year for directors to be allowed in which case the company could be charged the cost of self assessment with no BIK to be reported (provided that the individual BIK does not exceed £50).

https://www.gov.uk/government/publications/income-tax-exemption-for-trivial-benefits-in-kind/income-tax-statutory-exemption-for-trivial-benefits-in-kind

We then charge £50 to complete the self assessment with everything else being allocated to the bookkeeping for the relevant business interests which I would say is about right.

Thats a move away from the current situation where we bundle everything into one for charging purposes but the division of costs will make it better for the client (even though our invoices will need to be more detailed). i.e. rather than accounting services for period £900 it would be broken down into something like prepare accounts from supplied documentation £650, Rental property bookkeeping £200, Self Assessment £50. The first two of course would include feeder information for the self assessment.

all the best,

Shaun.

Shamus wrote:

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Leger wrote:

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Director rents a house out, so the charge I make is primarily made up of assessing rental profits, which I've always included it as a cost of rental. 

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I can see your arguement of seeing the self assessment as a cost to the rental business (not the limited company) However, the director is reporting their personal tax position from all sources so why should the rental business suffer that burden of that?

If a cost cannot be allocated unquestioned to a source then it must be personal expenditure so in this instance I am with Joanne and Johnny in that if the self assessment is being charged for it should be dissallowed.

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 The only additional work I've done as opposed to a private individual is to add the Directors salary and any Dividends, all of 5 minutes work.  The cost would have been the same either way.  I am surprised that it's allowable for the private individual but not the Director.

Think Joanne's got it.  He later became a repair man, then an old geezer in the nick, then an errand boy, then a wheeler dealer in a brilliant double act, then a serious tv role as a Detective Inspector, plus many great parts .  And if you don't get it from that heres another little clue from the series I'm referring to 

Nearly right, the program was Lucky Feller, the repairman was A Sharp Intake of Breath.  Lucky Feller was the very first thing I saw David Jason in, such a brilliant actor.

Have only seen sparodic episodes of Porridge and haven't seen the episode you refer to. Porridge is on my list of series to watch in full (currently Im watching Frost and Spooks.)