Tax Return Question

[runningmummy]

1. Do I add the storage shelves £190.00, Baskets £61.95 , Bookcase £44.99 and Car Seat £36.99 I bought as an expense or an Annual investment Allowance.

2. Do I show wages as an expense (i haven't taken any in a formal way just spent some of the money that came in to pay for my kids school dinners/swim classes etc).

This is my first return so any help would be appreciated. Thank you

[runningmummy]

So I have worked out I am right on the wages they are not an expense. If anyone can help me with item 1 I would really appreciate it as I am trying to do the return today as these are my only spare hours this week :(

[Chatterbox Childcare]

Item 1 - yes to AIA or expenses - the result is the same

item 2 - no wages - put all in your income and expenses and the balance is your profit which is all yours but you will be liable for the tax too

[runningmummy]

By doing this I reduce my loss by £333.32 and I will not be able to carry that amount forward to next year, should I keep it in expenses and reclaim loss as I have to pay back that money from the next years accounts.

[runningmummy]

I might not be explaining myself very well - I started on the 3rd March 2011 and have to do my accounts for the year ending 5th April 2010.
As you can imagine all my start up costs from the first phone call I made, registration fees, equipment are all showing for year ending April 2011 - total income was £361 and I spent a total of £1063.97.

For me this is a loss of £702.97 I have to make back as it came out of my husbands hard earned savings! When I list items as AIA I can not claim them as as loss yet I am seriously out of pocket. - What should I do - Please help :-((

[mama2three]

I would say to just put them through as expenses - you will carry forward the loss from high start up costd through to the following tax year. I certainly dont put anything through as AIA , and I have bought items such as storage units this year.
Not an expert but that is my understanding .

[MrAnchovy]

When I list items as AIA I can not claim them as as loss yet I am seriously out of pocket.

Yes you can, it makes no difference to the total amount you will be able to set off against next year's profits.

Having said that these amounts are not large enough to treat as capital expenditure anyway, so can stay in expenses (providing they are exclusively for childminding of course, or an appropriate %age of the total cost).

... but having said that it might be worth you submitting accounts for a 13 month accounting period. After you have filed your return as planned, wait until you have prepared your 2011/12 figures and see an accountant.

[Babycat]

This is what I was on about yey x

[runningmummy]

Thank you for all the replies. I would not have bought any of the items if I was not a childminder so I would like to reclaim the expense in some way. I am closing my business on the 9th feb 2012 as its all just not working out so next years accounts will only be for 10.5months. If I increase my expenses by the £332 pounds why does this not effect the amount of loss I can carry forward to next year?

[MrAnchovy]

If I increase my expenses by the £332 pounds why does this not effect the amount of loss I can carry forward to next year?

Because Annual Investment Allowance is also included in the calculation of your loss for tax purposes so if you increase allowable expenses by £332 and decrease AIA by £332 it doesn't make any difference. Try it and see :D