Sole Traders & VAT Receipts

[MTR-Hire]

Good afternoon,

I am in the process of setting up a small company which hires out video camera equipment and could really do with a little bit of advice, it will be a simple question for most.

The company will be registered as a Sole Trader as it will only be small. It is being set up in my spare time and I am working full time. I have set up a bank account so I can keep track on all the incoming and outgoing easily and I also have a balance sheet on Excel which has links to all receipts.

My question is.....as a sole trader do I have to keep VAT receipts or will standard receipts be ok? I have never had to fill out a self assessment tax form so am not sure what I will have to provide.

There are a few items I have bought to setup the company, one of them being from Argos and I don't know how to go about getting a VAT receipt!

Any advice on the matter would be greatly appreciated.

Many thanks.

Martin

 

[Scalloway]

Ordinary receipts will be ok.

 

[MTR-Hire]

Thank you for the response, it is very much appreciated.

 

[Jeremiah@RHJ Accountants]

Ordinary receipts are fine however try and keep VAT receipts on any equipment you buy as this can be reclaimed if you ever become VAT registered.

Read this http://www.rhjaccountants.com/accountancy-faqs/reclaiming-vat.php

May be worth speaking to an accountant for some tax planning advice depending on your profits and your employment income.

 

[Jeremiah@RHJ Accountants]

Basic Facts For 2014)/15

The tax free allowance is £10,000 - so tax is not payable on the first £10,000 of income.

If your taxable income exceeds £100,000 this allowance is gradually withdrawn.

The next £31,865 of income is taxed at 20% - any income above this (i.e. £41,865) is taxed at 40% up to £150,000 with income over £150,000 taxed at 45%.

As a self employed person Class 2 NIC is payable at the flat rate of £2.75 per week this is usually paid by monthly direct debit. If your self-employment income is below £5,885, Class 2 NIC is not payable.

Class 4 NIC is also payable at the rate of 9% on self employed profits between £7,956 and £41,865 and at 2% on profits in excess of £41,865

If you have any employees, they will pay NIC at 12% on salaries between £7,956 and £41,860 and at 2% on the amount in excess of £41,860 - as an employer you would pay NIC at the rate of 13.8% on any salary above £7,956.