Some general advice on accounts

[d0nnyoz]

Hi All

My first post so please be gentle!

I officially started my IT and Web business in July 2011 and have been running it successfully since. The definition of successful to me is that I earn enough money to pay my bills and I keep clients happy!

But now the serious bit!
I am now getting close to having to submit official documents to HMRC and I'm a little confused.
I have a registered company (me as Director) and I did employ a 'city' accountant to look after things for me, but I soon realised for my size of business, this firm were going to charge me institutional prices!!! So I decided to get out and being a man who likes to be in control and do most things himself, I want to complete all my accounts and HMRC filing myself - I like the technology!
I've got good records in terms of invoices and expenses so I need to understand what I need to submit and also what I can claim (expenses).

Firstly, I will need to submit a Self Assessment for me personally by the end of January 2013 and I want to get that sorted out quickly.
I have been paying myself a salary per month of £623 (tax year 11-12) which is my personal allowance. My accountant issued monthly salary tickets to me for this. I have also been paying my NI by Direct Debit.
I then take a dividend on a monthly basis. From my business accounts I tend to leave 20% for Corporation Tax and 10% for expenses (which I take anyway). So I pay myself the salary and then the rest in dividend.

Question 1:
When I do my SA as an individual, what do I put on the form as income?
Do I disclose my salary (obviously) and also my dividend?
What do I pay tax on? Only on salary?

Question 2:
There are quite a lot of question in this section relating to my Limited company.
My view was to use this model:
Revenue: £60k (I'm not sure on this final figure yet)
Salary: £7,475
Expenses: Not sure on this as I need to understand what I can claim but it might be say £4,800
Balance: £60k - (£7,475 + £4,800) = £47,725
Corporation Tax: 20% of £47,725 = £9,545

There are couple of things to tidy up in this though.
I need to be certain of the income as I have a rolling income sheet and this relates to only the 2011-12 tax year. I don't think it is as high as £60k.
I need to understand what expenses I can claim. There are a whole host of things I 'want' to claim but I know I can't on all of them.
Firstly, I mostly work from home. Can I claim any household expenses - energy, telephone (mobile and fixed), broadband, insurance, office furniture, general upkeep?
Secondly, I travel to clients on a motorbike and want to claim fuel and/or other costs - insurance, servicing etc?
Thirdly, I sometime purchase equipment or services to help with my business. Can these be claimed? (examples might be a new hard disk, a monitor, or web hosting, advertising)

I think I'll leave this as it is right now as it is already getting long!
But I've been working very hard at establishing my business and it has gone well - now the real hard work starts!

Thanks in anticipation!
D

 

[Walkol]

Home working - you can claim normally £4 per week.

Travel costs - easiest way is normally to pay yourself a per mile rate of 24p for all business mileage. remember to take a note of each journey, purpose and miles involved.

All equipment and services are allowable assuming they are fully for business purposes. Depending on how much they cost, they may be an asset rather than a profit and loss expense.

 

[elaine@cheapaccounting]

Have a read of our free guide on completing your accounts - this should help with your queries ...

http://www.cheapaccounting.co.uk/free-guide-to-keeping-your-accounts.php

 

[d0nnyoz]

Thanks Elaine

I've got the guide and it looks very thorough - some good bedtime reading there!

To complicate matters a little more I also have a 'self-employed' side to my business. I was advised to break up the various elements of my business and feed some of the revenue into my self-employed account and some through my Ltd Company account. So I have essentially 5 business areas: Web, IT Support, Consultation, Lecturing/Teaching, Misc.

Most of my income is from Consultation and goes through my LTD Company and most of the other stuff goes through my Self Employed account. Actually some of it is PAYE depending on who I work for (for example, I am an Official Wimbledon Driver, for the tennis Championships in June and they pay me after deducting tax).

I have no clue what impact this has on my accounts!

D

 

[elaine@cheapaccounting]

Thanks Elaine

I've got the guide and it looks very thorough - some good bedtime reading there!

To complicate matters a little more I also have a 'self-employed' side to my business. I was advised to break up the various elements of my business and feed some of the revenue into my self-employed account and some through my Ltd Company account. So I have essentially 5 business areas: Web, IT Support, Consultation, Lecturing/Teaching, Misc.

Most of my income is from Consultation and goes through my LTD Company and most of the other stuff goes through my Self Employed account. Actually some of it is PAYE depending on who I work for (for example, I am an Official Wimbledon Driver, for the tennis Championships in June and they pay me after deducting tax).

I have no clue what impact this has on my accounts!

D

blimey - sounds like you might be making things hard for yourself there

I do hope this wasn't with a view to keeping below the vat reg threshold

Might be worth a chat with one of our accountants just to check you are set up the "best way"

Drop me a PM with your contact details if you would like to have a chat - no obligation of course

 

[Davem1234]

Hi D

You do have a lot going on and its not surprising the city Accountants were looking for an arm and a leg!!

I admire you in that you want to try and do this yourself but there are only so many questions you can ask on a forum like this until you think you have all the answers but in fact you "don't know what you don't know".

I think you would be wise to look for another Accountant who would charge you a more reasonable fee which would give you the comfort of knowing your affairs are being dealt with properly and you are not paying more tax than you should do.

Someone on here (including me!!) could give you a quote if you were interested.

Regards

Dave