[Tosh]

Ronnie,

It's worth finding out how it works to help you run your business.

I mean I've read loads of times lads buying stuff they didn't really need and saying, 'Ah well it's tax deductable anyway'.

As if it means they've paid a supplier the money they would've normally have paid to the tax man.

But it doesn't work out like that.

If you spent £100 on your business, that money is deducted from your profit which means you've actually lost the £100.

However if you classed that money as profit, you'll get taxed on it (say 22%), so in this instance you've lost £22.

So buying something for £100 means you've lost £100, but declaring £100 as tax means you've just lost the £22.

Do you see my point?

[steve a]

iv just gone ltd so i think ill defo need one and i do hope in time to do some courses to get a better in sight but i fee l at the mo its money well spent.

maybe one day when i do have  ago ill be with you but at the moment i feel they do things fro me i couldnt do my self.

Thinking of doing this myself, will be keeping a close eye on how things go for you, if you don't mind a few questions now and then.
Q1/ do you employ? I have just taken an employee on after going it alone for the last 18 months, before that I always employed but sometimes they do your head in! Lol.

Q2/ Would it still be worthwhile going Ltd as I have now cut my profits and my tax by employing, but I will get a day or two off now.
(I hear you say cut your profits, what's the point of employing if it aint gonna make you money.Well I was having to work 6 days a week sometimes 7 and still couldn't cover all my work, so it was either shed some work or take a lad on and at my age i will be happy to take weekends and an extra day a week off, and get all my work done, even if it is less money.)

ie: £700 for 7 days working, knackered all the time, no social life and lots of tax
     £500 for 4 days working, not knackered, get to go fishing, less tax but less money.

Figures just plucked out from space only a for instance

[Niall McAllister]

I let George deal with it. I Check the receipts against the numbers it gives me, then all i need to do is take the capital allowance items and remember not to include them as normal expenditure.

also was at a self assesment course, and the guy there said that the room does not have to be used soley for business purposes to claim for its use. you work out what percentage of the house cost that room is using then work out what percentage of that use is for work and add that figure. myself, i don't claim for the room as it would be pennies.

[ronnie paton]

i do employ but ionly went ltd on 1 december so i dont have all the answers, i would say there is nothing wrong with employing and making a little less if your doing less work.
you need to employ to move forward, and if things go well you could be erning money for being in the office you cant do that by standing still.

tosh i understand the basics like you have explained but its all the employees wages and the extra bits like a percentage of your bills ect ect

[Tosh]

Pay accountant fee Tosh, and hopefully little or no tax.

Total and utter RUBBISH!

If you pay little or no tax, you've made little or no money; or you're lying.

FACT!

[Bobs Window Cleaning]

Blimey.....wish i had your accountant Ewan.

Bob

[Tosh]

I'm not anti accountant; I think if you employ or are VAT registered; you should use an accountancy service; because I think things may start getting complex, but for the average sole trader turning over less than than the higher tax band, then it's so easy to fill in your own self-assessment form; why pay someone else £200 to do it for you?

Just read the notes; fill the form out in pencil; then once you're sure it's right; use a black pen.

Blimey, I'm an ex accountant, though not a tax accountant; just supply me with your figures in the format I want them in, send me your paper tax return and I'll fill the form in for you and charge you £50! 

To me, that's not bad little side-line for ten minutes work while I'm sat on my bottom drinking a coffee.

I say again; YOU do all the work with providing the figures the accountant wants; he/she does the easy bit and enters them in the right boxes on the form.

[Chris B]

Ronnie,

It's worth finding out how it works to help you run your business.

I mean I've read loads of times lads buying stuff they didn't really need and saying, 'Ah well it's tax deductable anyway'.

As if it means they've paid a supplier the money they would've normally have paid to the tax man.

But it doesn't work out like that.

If you spent £100 on your business, that money is deducted from your profit which means you've actually lost the £100.

However if you classed that money as profit, you'll get taxed on it (say 22%), so in this instance you've lost £22.

So buying something for £100 means you've lost £100, but declaring £100 as tax means you've just lost the £22.

Do you see my point?

Good point Tosh, but those that say that may not be doing or thinking correctly.

Purchases for you business should are not just to enable you to make more money, they have a secondary purpose which is more or just as important and that is to add a financial value to your business should you sell it in the future.

Better than giving the tax man £22!

Good point Ewan, your business will only be worth what profits you declare in the long run, get a good honest accountant

Tosh, mine like most peoples accountants will have a secondary function, and that is "advice" throughout the year and for that bit of extra dosh its been well worth it for me....

[macmac]

sort it all out in one day at the end of each year, print a very basic statement up in word & give it to accountant.

Tony

Why give it to an accountant?

For your average sole trader, the majority of the work is 99% done by the person himself; the accountant just takes your figures and inputs them onto the tax form!  It must take him about 10 minutes; no more!

Filling in the form is the easy bit, it's your annual accounting of your expenses and profit that's the work involved.

Because when i look at a tax return form it doesn't make any sense! although i agree with your point, i just wouldn't know what to do.

Tony

[Tosh]

Tosh, mine like most peoples accountants will have a secondary function, and that is "advice" throughout the year and for that bit of extra dosh its been well worth it for me....

Remember, accountants are good at the 'bullpoo' factor; they'll make processes sound more complicated than they actually are; just to bamboozle you and keep your custom.

They're as hard-nosed as any of the successful window cleaners here!

But I agree, if your business is big and complicated; get an accountant; no doubt about it.  But if you're Mr Average like me, don't waste your money.