freeagent self assessment questions

[tracey.]

Hi
As per my previous post, I am preparing for the event that my accountant may not have my return ready in time - this is for my frst year in business, 24/25. For 25/26, I have a new accountant and I am using Freeagent.

Ive started a free trial free agent just i case I need to submit my own self assessement 24/25 - its a 'dummy ' using a bank account which was a family members business account before they stopped using it (I do have their permission and obviously wont be submiting anything. Ive input every transaction and uploaded my bank statements

However, I have two questions -I am a sole trader ;

I purchased a van from a private seller and on the banking category input Ive selected ''capital asset, VAT exempt', - is this correct? Ive gone onto the 'reports' and clicked 'over ride' on the 'other capital allowances' then input the amount I paid for the van. Its reduced what was showing as my tax payable from in excess of £1000 to £363. I thought given thats the SA form has correctly picked up my turnover from the inputted transactions, that they capital figure would be automatically export to BOX 25.
Also, I bought a new battery for the van , then had it serviced - am i right in saying these are 'motor expenses' i.e not travel. Is my van insurance 'motor expense' or insurance/

No doubt I will think of more things to ask as I spend my Sunday evening doing the job I thought my accountant was going to do...
Thanks

 

[tracey.]

would a purchase of 'work boots' be capital asset?

 

[Scalloway]

Also, I bought a new battery for the van , then had it serviced - am i right in saying these are 'motor expenses'

Yes

Is my van insurance 'motor expense' or insurance

It is a motor expense

would a purchase of 'work boots' be capital asset?

It is a running cost

 

[DWS]

It is a running cost

I like what you did there!

 

[tracey.]

Also, I cant see a category where workwear (overalls etc) would go.
There is also a category for 'use of home'. I am home based as in I dont have any need for renting a unit etc. Bills for heating, power and broadband arent in my name though but I do use these when doing admin at weekends or evening. How would I work out how much I could apportion to my business use, especially with the bill not being in my name.

 

[MyAccountantOnline]

Hi
As per my previous post, I am preparing for the event that my accountant may not have my return ready in time - this is for my frst year in business, 24/25. For 25/26, I have a new accountant and I am using Freeagent.

Ive started a free trial free agent just i case I need to submit my own self assessement 24/25 - its a 'dummy ' using a bank account which was a family members business account before they stopped using it (I do have their permission and obviously wont be submiting anything. Ive input every transaction and uploaded my bank statements

However, I have two questions -I am a sole trader ;

I purchased a van from a private seller and on the banking category input Ive selected ''capital asset, VAT exempt', - is this correct? Ive gone onto the 'reports' and clicked 'over ride' on the 'other capital allowances' then input the amount I paid for the van. Its reduced what was showing as my tax payable from in excess of £1000 to £363. I thought given thats the SA form has correctly picked up my turnover from the inputted transactions, that they capital figure would be automatically export to BOX 25.
Also, I bought a new battery for the van , then had it serviced - am i right in saying these are 'motor expenses' i.e not travel. Is my van insurance 'motor expense' or insurance/

No doubt I will think of more things to ask as I spend my Sunday evening doing the job I thought my accountant was going to do...
Thanks

Are you using the cash basis as a sole trader?

Have a read here

 

[MyAccountantOnline]

Also, I cant see a category where workwear (overalls etc) would go.
...

You can create new account headings in FreeAgent. FreeAgent explain how this is done here

https://support.freeagent.com/hc/en-gb/articles/115001216910-Add-a-new-accounting-category

Or use sundries

 

[MyAccountantOnline]

...
There is also a category for 'use of home'. I am home based as in I dont have any need for renting a unit etc. Bills for heating, power and broadband arent in my name though but I do use these when doing admin at weekends or evening. How would I work out how much I could apportion to my business use, especially with the bill not being in my name.

FreeAgent have a good explanation here -

https://support.freeagent.com/hc/en-gb/articles/115001218230-Record-business-use-of-home-expenses

You could also consider using Simplified expenses

 

[tracey.]

Thank you for your help

 

[MyAccountantOnline]

Thank you for your help

You are very welcome it's what the forum is for.

 

[tracey.]

also...over the last year Ive bought several items second hand from FB Marketplace (ladder rack, tools, laptop and printer etc) - always paid cash which Ive either withdrawn from ATM or used cash I had taken as drawings. Ive recorded these on the expenses (ie not a bank transaction) and categoriesed as per the available drop downs.
But as theyre from private sellers all except one has been a cash payment so no receipts (items are from private sellers, not traders) - is this receipt thing likely to be a problem. Buying like this has saved me a fortune rather than buying new

 

[MyAccountantOnline]

also...over the last year Ive bought several items second hand from FB Marketplace (ladder rack, tools, laptop and printer etc) - always paid cash which Ive either withdrawn from ATM or used cash I had taken as drawings. Ive recorded these on the expenses (ie not a bank transaction) and categoriesed as per the available drop downs.
But as theyre from private sellers all except one has been a cash payment so no receipts (items are from private sellers, not traders) - is this receipt thing likely to be a problem. Buying like this has saved me a fortune rather than buying new

Have you got any evidence/proof of purchase?

 

[tracey.]

no, - apart from one who was happy to getpaid via bank transfer, i did ask others if they would mind signing a receipt/slip of paper but they were suspicious of my motives, maybe thought they would be investagted for reselling or something

 

[GLAbusiness]

Tax authorities (e.g. HMRC in the UK) generally accept self-generated records for low-value cash purchases

 

[paulears]

If you are a sole trader - then I identify this kind of thing as bills. If I don't have a receipt but used a debit card, I use a screen shot of the amount coming out of the account as my evidence. I create a bill for anything paid for in cash and clear it with the money paid to user or received from user as appropriate.

 

[MyAccountantOnline]

no, - apart from one who was happy to getpaid via bank transfer, i did ask others if they would mind signing a receipt/slip of paper but they were suspicious of my motives, maybe thought they would be investagted for reselling or something

The difficulty you have without any evidence is that if HMRC challenge the expenses you've claimed you have nothing to show you've actually incurred the costs.

It's rare I see HMRC challenging expenses now but they do, and going forward you do need to keep something as evidence you've paid an expense. A receipt is best.