Acconting for cash purchases from private sellers

[Rajinder]

Hi,

New to the forum and have been reading up on some threads here.

I am considering starting up a new part time business.

I visit carboot sales and markets, and find that you can purchase many items to sell on for a profit. Mainly sell it through ebay or amazon.


I usually purchase electronics items, mobile phones, mp3 players etc...

My concern is that I would buy from private sellers who cannot produce a receipt on sale.

How would I go about recordig this as a purchase in the business without an invoice?

Would hmrc accept cash purhases recorded by the trader? Or is this not a business because theres no invoices?

Sorry if spellings are incorrect as i have posted this thread using a phone

Thanks

 

[Williams lester]

There is definitely a business as you are trading for profit. You can record the purchase price of the items yourself, that should be no problem.

 

[MyAccountantOnline]

Hi,

New to the forum and have been reading up on some threads here.

I am considering starting up a new part time business.

I visit carboot sales and markets, and find that you can purchase many items to sell on for a profit. Mainly sell it through ebay or amazon.


I usually purchase electronics items, mobile phones, mp3 players etc...

My concern is that I would buy from private sellers who cannot produce a receipt on sale.

How would I go about recordig this as a purchase in the business without an invoice?

Would hmrc accept cash purhases recorded by the trader? Or is this not a business because theres no invoices?

Sorry if spellings are incorrect as i have posted this thread using a phone

Thanks

Hi Rajinder

Its about time UKBF worked well on a mobile phone! It drives me potty when I try to use it with my Blackberry.

This is from HM Revenue & Customs website -

''The exact records you need to keep will depend on the types of income or gains, tax deductible expenses, personal allowances, other deductions and reliefs you put on your tax return or claim. Whatever records you keep, they should be good enough for you to fill in your tax return or claim accurately.

If you claim business expenses, you'll need to keep the necessary records to back them up. For example, if you use part of your home for work, you will need to keep sufficient records to show the proportion of heating and lighting costs that relate to your business and your private use.


Sometimes you may not get evidence, such as a receipt, for cash expenses, especially where the amounts are small. If this happens, make a brief note as soon as you can of the amount you spent, when you spent it and what it was for. We don't expect you to keep photocopies of bills, although you may find them useful''

 

[Rajinder]

Thanks for the replies.

Right well atleast i know thar i can record for purchases with no receipt.

Me and a partner are projecting totals for the business year once we start trading. We believe we could possibly reach the 68k threshold in the 4th qtr.

So we would have to register for vat...

We will also be buying stock from a company who is vat registered, so we would be able to reclaim some vat.

Though like i mentioned in the op, that i would buy some second hand mpbile phones, mp3 players etc... We would have to pqy marginal vat pn these products.

Will it get confusing in the books if we mix standard vat itemals, and marginal vat for the secod hand goods?

Do the businesses need to be seperated or is it ok to put them both in one business and just use both methods for paying vat.

Thanks once again.

 

[Figurate]

It won't be confusing to mix standard VAT items and marginal VAT items, if you keep good records. Quite often, businesses who use a VAT margin scheme also sell goods under standard VAT accounting.

For the marginal VAT schemes, you will also need good stock records in order to be able to correctly calculate the margin for VAT purposes (the exact nature of the stock record requirements depends on the scheme you're operating under)