Hi, I have tried searching for the answer to this to no avail, not specific anyway.
I am a soletrader operating well under the vat threshold, so not vat registered.
I import items to sell on.
I created a spreadsheet that I enter stock details into and then as I enter what sells the stock changes accordingly to leave me with quite an accurate stock total and value at
the end of the tax year. Now this is only accurate if I am entering stock value correctly.
Simple example (ukp for clarity), if I buy 100 items at £1 each =£100. Delivery is say £20. Import duty & vat is say £30. Bank international payment fee = £10
I currently add all costs together and divide by qty ordered (100) to give me a stock value of £1.60 for each item.
Now sometimes this stock could last 2-3 financial years.
My question is, should I be calculating stock like this? or should I be valueing it at cost (£1)
The benefit of the latter would save me tying up £60 for 2-3 years and could I possibly just add this figure as an expense in the year I purchased it.
Obviously this sum is an example but you can understand this can be 100's of pounds in delivery etc that will not be accounted for until the item sells.
I do hope you understand my question, any response would be much appreciated.
I would go one step further and suggest you get an Accountant - I can see at least 6 issues in your post, that I doubt will be fully covered in an internet forum response! Who knows then what else you are doing wrong.
__________________
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
Hi Joanne, there is one thing worse than telling someone they have made mistakes and that is not to point the mistakes out :)
I understand now that this is perhaps the wrong forum and appreciate we all have to make a living and I do plan on getting an accountant, I just need a little guidance to ensure I am keeping my records correctly. Even with an accountant it has got to be recorded correctly by myself, I dont want to dump a sack full of receipts on the accountant at the end of the tax year do I?
To simplify my question for a simple yes/no answer. I have heard stock is essentially what can be sold. So can delivery cost, import & vat cost and bank fees be put in expense catergories similar to stationery etc for the tax year they are paid for instead of spreading these costs across the stock?
Hi Joanne, there is one thing worse than telling someone they have made mistakes and that is not to point the mistakes out :) nice try. Of course, if I was your Accountant, or bookkeeper, or indeed your Accountancy tutor, I would be pointing out your mistakes, whilst charging for doing so.
I understand now that this is perhaps the wrong forum and appreciate we all have to make a living and I do plan on getting an accountant, people always say there are planning, but have you heard of tax planning? They key is in the word. An Accountant cannot help you save tax unless you involve them before you start, so stop planning and appoint one. I just need a little guidance to ensure I am keeping my records correctly. Even with an accountant it has got to be recorded correctly by myself, I dont want to dump a sack full of receipts on the accountant at the end of the tax year do I? you could do, we are quite used to that, but as I've said, getting one now can resolve that issue in part. But bear in mind we also spend most of lives sorting out the mess created by clients who don't wish to learn. So at least you sound better than some. But just remember a little knowledge is a dangerous thing, so you have another couple of options (1) get a bookkeeper as well. Cheaper than the Accountant for the day to day stuff/you can do what you do best leaving them to do what they do best. Or (2) go on a bookkeeping course. To simplify my question for a simple yes/no answer. I have heard stock is essentially what can be sold. So can delivery cost, import & vat cost and bank fees be put in expense catergories similar to stationery etc for the tax year they are paid for instead of spreading these costs across the stock? Therein lies the problem. It's not a yes or no question. You think it is, but you don't know, what you don't know and it's not a topic that can be covered with one of two small paragraphs, never mind two small words
I think it's a big rich not to have even acknowledged Johns post when you have taken him up on suggestion and posted on the other forum, albeit you have now described your situation quite differently to how you did on here. So your response over there will no doubt not cover the position properly, certainly not as presented here, especially in the realms of two of the costs you have mentioned, the final accounts and therefore your subsequent tax return.
Edited to add colour formatting
-- Edited by Cheshire on Tuesday 1st of October 2019 09:14:46 PM
__________________
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 others knowing the minefield that you are stumbling into.
Almost from the get go at the same time that accountants learn theat Capital = assets - liabilities they learn the line that inventory is valued at the lower of cost and NRV... Thats as simple as it ever gets and year of experience and studying financial reporting standards later they are in a position to hold the hands of business owners and guide them through the minefield.
Tempers can run high when business owners looking to save a little end up costing themselves a lot as good financial people such as can be found here and on Aweb genuinely care about businesses and want them to succeed so it's always frustrating to see owners make mistakes but without knowing the whole picture we are not in a position to help so the advice you need is always to seek professional representation.
And of course, thats the reason the site isn't for business owners as if you ask what you perceive to be a simple question and someone answers it without knowing the full story we may inadvertantly be giving you the wrong information.
Unless you know enough to ask the right questions and understand the full answers then please get an accountant and take their advice over anything that you may read on any business site,
good liuck with your business,
kindest regards,
Shaun.
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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.
Hi Ray Just to confirm that I have your email, it dropped into my spam box so I have only just seen it today. Sorry I have not had the chance to respond.
I do have a client in your area, but have a full client base just now and dont deal with clients who sell on Ebay. There are folk on here who are nearer to you so why not post an ad for someone, but I would advise if you are likely to get close to the VAT threshold that you get one who is used to importing/exporting/VAT. Be helpful to know what sort of product you sell.
-- Edited by Cheshire on Thursday 3rd of October 2019 06:37:28 PM
__________________
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
