I run a very small pet sitting business that was part time until recently and I have just reached my first year end. I would appreciate clarification on a couple of points and for yearend procedures using QB pro desktop 2015 please.
I have looked on the gov.uk website and worked out what I can charge as a simplified expense for working from home, but am wondering how I work out internet usage and mobile phone usage? It's only in the last 2 months that I have taken the business full-time so business related usage would be minimal.
When I first started the business, I bought a new desk and added half the cost of the desk to my accounts, however not fully understanding what I was doing as was fairly new into my studies at the time (not that I know what I'm doing now, really ) the mistake I made was adding the cost to fixtures and fittings, not realising the code was for a fixed asset. Should I journal that cost to an expense account rather than keep it as a fixed asset (it wasn't enough money to keep it as a fixed asset and depreciate)?
Lastly, are there any procedures to follow to close down a year end of QB as in Sage? It doesn't appear as though there are, but if there are any steps I should follow? I am going to do my own self-assessment, so if there is anything else you think I should do/know, I would be most grateful for any advice.
Hi Tara
Im afraid this is not just a couple of points to be considered. Dont forget as a sole trader it is not just about completing your self assessment, but also the accounts of your business. Also you need to be careful with your business year end if it is not matching the tax year.
This is a two-fold question and to be honest there is a lot of ground to cover. The reason I say two fold is because there are the accounting concepts to get your P&L and Balance sheet prepared before you even start on the self assessment, then there is the close off required in quick books to reflect your adjustments and match to your Accounts. Given also your admittance to 'not knowing what you are doing' and the fact that you have half a desk in the business i would strongly suggest you use the services of an Accountant. Now - you dont have to pay loads, and you can actually learn more from seeing how a proper set of books is put together for a sole trader better than attempting to do it yourself and getting it badly wrong and paying too much tax (no way would I ever if it can be avoided!) or not enough and being fined and having to pay penalties when found out. If you dont understand anything they do then you must ask sufficient questions until you do, because you are responsible for that accounts and the tax return being correct - what a great way to learn. although I would caveat that with the fact that the learning is only covering your and your business for a set of circumstances that will not necessarily be repeated (ie year two will be completed differently in some aspects), but nevertheless a good start.
You need to decide what you are doing with the desk - is it in or out? If its in, it belongs to the business not to you. Should it be capitalised or expensed - how can we say, we have no idea how much its worth (could be a £5k desk for all we know) and we cannot know what specific impact it will have on your own business. Should you claim capital allowances? Have you consider that? Do you know enough about it and how that works? Devils advocate - why have you chosen the simplified expenses method as opposed to the other? Have you checked which is best for you and why?
Sorry - this is not answering your question, but you need to learn to walk before you can run - I would say keep to the bookeeping side for now and let the professionals take over on the Accounts side. By next year you may be more ready to handle such.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
You do realise that Joanne answered as well don't you Tara.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I dont think Tara liked my answer, although I was trying my best to help by hopefully helping her to avoid fines etc, but I also did give some rather big hints about some of the things that need to be considered, to aid her research.
Tara - I am led to bellieve from a post I think I've seen in response to another of yours, that the ICB provide a telephone helpline so perhaps they can guide you with the year end stuff, it's helping a real live scenario. Or perhaps you might get help via their buddy programme?
-- Edited by Cheshire on Monday 8th of August 2016 08:22:26 PM
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Apologies for not responding and thanking you for your response sooner. As it was quite complex, I hadn't until recently had a chance to properly look through it and respond, but I appreciate from your second message this probably looked very rude - that was unintentional, so please accept my apologies.
With this all being very new still, I find myself still not being entirely sure what I should know myself and what's for the accountants to deal with. I have in fact passed my accounts onto a friend who is an accountant (sadly she has since been unwell so I still haven't heard anything back!) and she is looking through them for me and can let me know what changes I need to make and let me know if/where I've gone wrong.
I have posted a message on the ICB forum re. finding a 'buddy' but apparently there is no such system in place?! I though I had read before that there was such a system so am a bit confused by this as a couple of other newly qualified member thought the same.
Hi Tara
Thank you, but dont worry, its good to hear you have got someone involved, although not good if they are unwell. Hopefully you are still within the deadlines for reporting and the good thing is it sounds like she will give you the pointers you need. If you followed the year end process suggested above you will see that the income and expenditure accounts will have cleared out into the balance sheet one the last day of the year. Just do a report that spans the year end and you should be able to see this process. So when your Accountant does the year end adjustments she will have allowed for this process.
Not sure what you are planning doing now you are qualified. Are you looking at doing what I call pure bookkeeping ie up to trial balance (just say looking after Limiteds) or aiming to look after sole traders? Or even progressing your studies perhaps with the final level, or perhaps AAT?
Surprised about the buddy process. Im not ICB, but have heard that expression a fair few times and thought it was a great idea. Great way to learn is to just keep up with the daily doings on here - we cover a right old range of stuff, some of which you might not be interested in for now, but will prompt a memory when perhaps you are faced with it from a client. Plus, just keep asking away, bite sized Qs are the best where you can as they are easier to be answered by a range of people, somke of whom just stop by when they are having a brew or lunch.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
) the mistake I made was adding the cost to fixtures and fittings, not realising the code was for a fixed asset. Should I journal that cost to an expense account rather than keep it as a fixed asset (it wasn't enough money to keep it as a fixed asset and depreciate)?
