Originally Posted by
Hollyhock
Hi,
I'm trying to sort out my very first tax return and, in spite of having read various very helpful guidelines, I still have a few questions. If any of you could answer some, I would be so grateful!
I am using the fabulous worksheet by happytoddlers:
- how do I list all the purchases for which I don't have a receipt (e.g. bought on gumtree)?
I would print off the advert, highlight the payment on my bank statement, and attach that to my accounts for that year
- how precise do I need to list food expenses? Do I have to divide the cost of a pack of flour into portions of bread etc...?? (it seems silly to me, but it's the first time I'm doing this...)
This is entirely up to you, as HMRC say they accept 'reasonable costs' for food. However you work it out, make sure you keep the receipts and your working out showing how you arrived at that figure with your accounts.
Personally, every few months (as costs fluctuate) I take my shopping receipt, pick a day, and calculate the food costs for the whole day to establish the meal cost, highlighting the ingredients on the receipt.
So everything needed for breakfast: 1/3rd of the cost of the cereal as that lasts 3 days, cost of the milk used, cost of bread used, approximate amount of butter used, add all the costings together, then divided between the amount of people served = individual breakfast cost per person
A glass of juice for example:juice costs xx amount per bottle, the bottle says xx servings so, cost divided by servings = amount claimed per drink
Lunch and tea: cost of all ingredients used to make the meal, divided by the amount of people served
Things like, a tsp of fennel seeds, I'll put down at 2p, yes, it's a small amount, but it soon adds up over the cost of the whole meal.
I will then use the figures for each meal that day as my price claimed for each meal until the next time I recalculate
- there are 3 shifts on the spreadsheet - is this possibly not relevant for everybody and if so, can I just use one of the three columns, and ignore the other two?
Sorry, don't use the spreadsheet so can't help here
- in the column "receipt number", do I just number the receipts (1, 2, 3...) or do I have to enter some number that can be found on a receipt...? (I told you it's the first time I'm doing this!)
Generally, in accounting terms, the receipt number is normally the number on your receipt, or the last few digits. This is so, should you be audited, the tax man can tie in the actual supplier receipt to the entry in your accounts, this is more relevant to business that are vat registered or ltd co's really, to ensure they are calculating their returns accurately.
If you wish to number your receipts 1,2,3.... you can do that also, however, when you come across a receipt you forgot about lying in the bottom of your bag/car/pocket, you would have to enter it in your accounts in number sequence rather than date sequence. It's not an issue to do it, just to be aware that when you check things later you've done it that way lol
- where do I have to list the start-up grant money?
I'm not familiar with the system you use, however, it's an income, so will go either in an income entry or a specific grant column. If you're putting it in an 'income' column, make sure you note in a 'description' or supplier column, that it is a start up grant.
You won't be taxed on the grant amount as the purchases you make will cancel out the amount received
- do I have to list money I was given/lent by my friends and my parents?
That depends, was it lent to you prior to becoming self employed, or since you've become self employed?
- how do I list up the monthly rent (amongst expenses I assume, but what do I write into "receipt"? I don't get a receipt from my landlord, and I pay cash)?
Rent is a percentage based on the amount of hours worked, as is, gas, electric, council tax and water rates, not the full amount.
Presumably you have some sort of rent book, statement, or other means of proving you're paying your rent? Evidence would be required if you were audited,
that you have been paying and therefore claiming the correct amount
- how do I lest wear and tear (I read it's 10% that we can claim)?
Wear and tear is 10% and would be listed as an expense
- the first sessions I was paid for in cash, and unfortunately didn't keep any records...will my (signed) attendance register suffice to show how many hours I was paid for?
So long as you have entered all cash payments into your accounts income, you should be fine
- does the time spent cleaning up, planning, shopping, cooking and baking in preparation as well as paperwork count as work hours, or not? I found varying advice regarding this (I think in one of the HMRC webinars it was said that work time does include the above).
For your business accounts no, any unpaid hours do not get counted into your allowable percentages. For claiming tax credits/benefits/etc,
yes, you can use unpaid hours as 'working hours'
Hope that clarifies the reason there's varying advice lol
- I'm going to fill out the online tax return. Will I have to attach digital photographs of all the receipts??
No, you will not have to provide any physical evidence when submitting your accounts, however, you must keep all relevant information on how you arrived at the declared figures, for a period of 6 years, in case you're chosen to be audited in the future
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