Self-Employment

LiE · 23 Mar 2009 at 13:56

Need some advice regarding self-employment. My girlfriend runs her own business as a mobile hairdresser and has recently registered as self-employed.

I've read over http://www.hmrc.gov.uk/sa/self-emp-part.htm

My questions are:
1. Any advice on creating a profit/loss account? The way she pays herself is income - expense = wages.
2. What needs to be done to claim tax relief on fuel?

Thanks

LiE · 23 Mar 2009 at 14:43

Typically how much is an accountant? The business isn't turning over a large amount each month, about £600-£800.

LiE · 23 Mar 2009 at 16:46

AtreuS said:
Im self employed and have been for 4 years now.

You can make things overly complicated or you can do things the easy way, it depends on how you conduct your business.

I simply keep a record of all the invoices i give out and how each gets paid.

I then hand this to my accountant at the end of the year, with all the reciepts for the things i can claim tax back on ( the accountant will tell you ) and she does my tax return. She charges me £75 for this.

I dont have a business account i just pay any cheques into our joint account and any cash likewise. I dont have a large amount of business clients so i simply dont need to make a massive job out of using accounting software and so on.. its simply not needed.

If you only do cash jobs, with cheques sometimes, then just keep a record of all invoices and how they are paid to you. Keep your bank statements and make notes of payments in of cash ( should you ever be asked questions by the tax man ) and pay an accountant to do your end of year tax return.

This sounds like a good option. So do you have a spreadsheet with sales and expenses? Keep all your receipts and hand them over to the accountant to do tax return?

Also, how is income tax/N.I calculated, or is that included in the tax return?

LiE · 23 Mar 2009 at 17:24

Thanks

How much is your accountant if you don't mind me asking?

LiE · 24 Mar 2009 at 07:30

Do you have to register for VAT if you turn over less than a certain amount?

LiE · 24 Mar 2009 at 10:53

Jonny69 said:
2. In your position all the fuel you use for business use is considered an expense. You charged £30 for the job but used £10 fuel, your taxable income on that is £20. Keep all your fuel receipts, both personal and business, so if you're ever asked about it you can show that you haven't just been putting all your fuel through as expenses. I found this quite easy because I had a bike that was only used for the business.

What's the best way to work out the business mileage? Is it a simple case of keeping track of how many miles you do for work, and claiming 40p per mile as the cost to the business?

LiE · 24 Mar 2009 at 13:46

vonhelmet said:
That's to do with reimbursing mileage costs to employees using their own cars. If you're a sole trader you'd just deduct the actual cost of the petrol and then claim capital allowances on the business element of the cost of your car.

How would you work out the cost of fuel based on mileage if the car is used for personal and business?