[s.hughes]

yes bank statements are ok if you say you spent 100 on petrol you need to back that up rembering if you use you work car for pleasure too you will only be able to take a % of that 100 thats why i got van you can claim the whole 100% back

i have an estate car and apparently this can be classed almost as a van so I get a higher %. So my accountant says.
All I do is put in my daily earnings and outgoings, print them of at the end of the year and send it to my accountant with all receipts in date order. He accounts for gas and electric only a very small % as I run the business from home. He adds his cost into the accounts and then tells me how much tax I have to pay.
To keep my accounts up to date I use quicken finacial program.

Steve

[thewindowcleaner1]

We had an accountant for the first year and got all the tricks from him ie claiming 40% of your home telephone bill, a % of your gas, electricity, morgage etc and well worth the first years fee he charged.

I was told that if you claim a percentage of your morgage as a bussines expence then if you come to sell your property then the % profit of the sale that you claimed against tax becomes a taxable income from the sale of an asset ? (I may be wrong though) the thought of it stopped me doing it

[Perfectly Clean]

I want to thank everybody for their input in to this subject, shows what a great forum this is.  I am begining to understand a lot more about my book keeping.
I have 1 more question, at the end of the financial year what do I show the tax man, the way I have read all the post is this.....
I need my books showing all income (not by each job just the final amount each day) also all receipts for expenditure.
Is this correct? Also I may seriously think about an acctountant for the first self assessment.

Thanks again

Paul

[Paul Coleman]

I want to thank everybody for their input in to this subject, shows what a great forum this is.  I am begining to understand a lot more about my book keeping.
I have 1 more question, at the end of the financial year what do I show the tax man, the way I have read all the post is this.....
I need my books showing all income (not by each job just the final amount each day) also all receipts for expenditure.
Is this correct? Also I may seriously think about an acctountant for the first self assessment.

Thanks again

Paul

I use Microsoft Works spreadsheet.  If you have version 7 or later (it's pre-installed on manyt new computers), I could send you a template of how I've sorted things out for income.  It allows for up to 33 jobs per day (more than enough for me) and shows the daily total.  Way over to the right of the spreadsheet I have it set up to add the daily totals into monthly totals.  At the bottom, it adds them into a yearly total.  I also have a separate spreadsheet in Works for expenses which allows for proportional expenditure (i.e. where an item is part business, part personal).  I have that set up to show a running total too.
If you wish, I could send you a template of the income spreadsheet (customer addresses deleted of course  .)  I could send you an actual copy of the expenditure spreadsheet to give you an idea of how it works.  I've no problem with leaving details of expenses on there to give you the idea as I've nothing to hide.

[Paul Coleman]

At the end of the day (or the financial year, really) it's all about ins and outs.


What came in and what went out.
#
If you cannot account for where £x came from, you are likely to be taxed on it.


So keep ALL paperwork relating to ALL your bank accounts, and try to account for every penny that made a movement.

Actually Graham, it's worse than you state.  If they think that someone is pulling a fast one, they not only tax you on it, they fine you on top of that.

[Sarah Sarill]

"I was told that if you claim a percentage of your morgage as a bussines expence then if you come to sell your property then the % profit of the sale that you claimed against tax becomes a taxable income from the sale of an asset ? (I may be wrong though) the thought of it stopped me doing it"

An IR employee told me that if you include any % of your morgage or rent and any utilities it will be written in as rental fees and usage costs.  In effect you are personally renting a room (or premises) to a company (your own).  The way the % is calculated is by adding up the number of habitable rooms in your property (bedrooms and living areas only - don't include toilets, kitchens and halls etc). Take the annual morgage/rent bill and divide it by that number.

ie: 3 bedrooms, 1 living room and 1 dining room = 5 rooms
     morgage pa £6000.

     therefore cost of room is the morgage cost divided by the no of rooms

     £6000 divided by 5 = £1200

Same principle for gas, electricity, water rates.

Just one other thing if you do your own books you can also claim for cleaning  expenses for the room involved and ive even put through an invoice for having the carpet cleaned and it was passed !!

An accountant should claim for everything legally possible so well worth the  first years fee of £450 I paid him - he saved me that straight away.

Its a minefield though so glad the wife does it for me !!!!!

[Paul Coleman]

"I was told that if you claim a percentage of your morgage as a bussines expence then if you come to sell your property then the % profit of the sale that you claimed against tax becomes a taxable income from the sale of an asset ? (I may be wrong though) the thought of it stopped me doing it"

An IR employee told me that if you include any % of your morgage or rent and any utilities it will be written in as rental fees and usage costs.  In effect you are personally renting a room (or premises) to a company (your own).  The way the % is calculated is by adding up the number of habitable rooms in your property (bedrooms and living areas only - don't include toilets, kitchens and halls etc). Take the annual morgage/rent bill and divide it by that number.

ie: 3 bedrooms, 1 living room and 1 dining room = 5 rooms
     morgage pa £6000.

     therefore cost of room is the morgage cost divided by the no of rooms

     £6000 divided by 5 = £1200

Same principle for gas, electricity, water rates.

Just one other thing if you do your own books you can also claim for cleaning  expenses for the room involved and ive even put through an invoice for having the carpet cleaned and it was passed !!

An accountant should claim for everything legally possible so well worth the  first years fee of £450 I paid him - he saved me that straight away.

Its a minefield though so glad the wife does it for me !!!!!

Surely though, there would be no tax advantage in doing it that way??  What you would gain in paying less tax from your business would be exactly offset by the extra personal tax you would need to pay by renting the room to your business?
I do book a small amount of gas and electricity against my tax bill though. 
This covers lighting, running the computer and heating the room.  It also covers the use of my washing machine for washing overalls etc.  I even book a proportion of the cost of the washing machine, washing powder, and any repairs to it plus the heating required for drying cloths in the airing cupboard.  However, my (possibly incorrect) understanding is that the actual room as a proportion of the mortgage would be treated differently as it is a *capital* asset.  I always believed that a proportion of the profit when selling the house would be subject to Capital Gains Tax.  My accountant told me this some years ago.  Next time I meet up with him, I will discuss the situation to see if there have been any changes.

[dai]

I buy 6" by 4" stock cards. These only have lines going across the page so I  draw lines from the top to the bottom too.
At the top of the card I write the street name, I draw a line from top to bottom 1cm wide on the left of the card, in this I put the house number.
The next colum is 3 cm wide and in this goes the clients name. the next colum again 1cm wide goes the price for the job. I then fill in the rest of the card with columns half a cm wide. You will get 14 clients on each side of the card. If they pay they get a tick in the square next to their name, if they are out they get a zero.
When they do pay when Im collecting I put a tick through the zero.
I only have to look at the cards later to know who has paid and who owes. The cards are in plastic wallets which I keep in a small photo album. To make the book keeping easier I have what I call a buffer fund.
This fund of about £200 is used to top up any shortfall for the day. If I earn £100 and I am owed £20 I put the £80 in the bag and top it up with £20 from the fund. I put the £20 back when I have collected. I know you can't do this with big commercial jobs but it saves me hassle on domestic bookwork. DAI

[Perfectly Clean]

Hi shiner, Can I take you up on your offer of sending me a copy of your expenses sheet, I just want to have a look at the lay out.

Let me know if this is ok and I'll send you my email address.

Thanks all for all your replies I really thought I had to show each job and the value, I have learnt a good few pointers.

Thanks again.

Paul

[Moderator David@stives]

it is still worth keeping a day sheet.
just start from now ,it should be ok.
it just shows you are being more thorough and is good for double checking things.

[Paul Coleman]

Hi shiner, Can I take you up on your offer of sending me a copy of your expenses sheet, I just want to have a look at the lay out.

Let me know if this is ok and I'll send you my email address.

Thanks all for all your replies I really thought I had to show each job and the value, I have learnt a good few pointers.

Thanks again.

Paul

I do believe that you are supposed to show each job and its value (and date).  Ordinarily, being less detailed would not be a problem.  It may be a problem if the IR ever decided to check out your financial affairs.  However, if your lifestyle and income appear compatible, there probably wouldn't be a major issue.

Sure thing.  Feel free to send me your email address.
I will put mine on here and you can email yours to me.

infoATzzxxscrimzzxx.co.uk

Change AT to @ .
Remove the z's and the x's to get my address.  I've done it that way to avoid the spambots getting my address.

[Sarah Sarill]

Hi Paul,

The Shiner is spot on about what the IR want to see.  I was told to show address, clean price, date amount paid.  I was also asked to include a column to show why the charged price was unusually low or high.  ie  front only clean, including conservatory or inside and out.

You may feel it's a waste keeping all of this info just for your records but from experience with the IR they take no prisoners and come down hard on anyone keeping inadequate records however big or small their company is.

MY excel sheet was given the seal of approval by the IR although I am sure there are more comprehensive designs/layouts out there.  Cant upload it to include on this reply but if you want to see a copy let me know.

I have one sheet per day of work with the months total added up at the bottom off all my sheets. 


Good luck.

[windows_chepstow]

- we tried to claim unprinted t-shirts and jeans when thats not acceptable either.

MMMmmm.  It's called SELF ASSESSMENT, so I do it myself.  I did consider getting an accountant and went to see a local one in his house.  (For the Chepstow lads, it was Andrew B........ in the Danes).  His house, although in a nice area was utterly filthy.  So was he.  There was piles of paper all over the place and he hadn't had his windows cleaned in years.  Inside it stank.

I didn't have the guts to tell him to his face that I had no confidence in him what-so-ever and although he was cheap (£120) I decided to do my books myself.

Get a book from a library; there's plenty in there about self-assessment for the self-employed and learn how to do it yourself.

Anything, including clothing that I purchase for the use of my business I class as 'tax deductable'.  However, I've not had a tax investigation: but if I did get one and found out the £30 quid's worth of t-shirts weren't; I'd just pay the tax-man back.

At the end of the day, we're window cleaners; and Self Assessment is meant to be done by your'self', as the name implies.  A little bit of knowledge can be 'streched' very far.

Get a book from the library is my advice!  It's not rocket science.  I believe HMS Tax Inspectors have better things to do than harrass hard-working window cleaners over a few quid spent on T-Shirts.

I reckon if you purchase clothing for work, then it should be tax-deductable.  When I was in the army I had my uniform given to me (apart from my Mess Dress; but I was only 'encouraged' to buy that).

Officer's, even though they generally earn more than soldiers get their Mess Dress issued for free!

The flimsy reason given was that 'Officer's' have to socialise to a particular 'level' because... well because - I can't even remember what the reason was.

Anyway, I had to fork out £600 for my Mess Dress after 13 years in the Army, when some bloody snot nosed 18 year old lieutenant - just out of university - got his at the tax payers expense.

Educate yourself and use it to your advantage is my advice!

Just keep in mind that if you've paid at least £600 in tax this year, it's only kept one wet-behind-the-ears officer looking smart in his 'getting drunk' uniform, and no doubt it'll be wrecked as soon as he gets crippled in the Sergeant's Mess when playing Mess Rugby.

There's no justice in this world when it comes to paying taxes.  All's fair in love and war as they say; including paying your taxes!

Rant over!

[Sarah Sarill]

Tosh you are forgetting some of us cant read or tipe so understanding a indusrty and all its technicalities that someone has trained 5 years for is beyond SOME w/c's.

I came to w/c from a manufacturing industry and aving worked in a factory all my working life I had no clue how to set up a P&L sheet let alone decide what 'tax deductable' was let alone if I could claim it.

Im not dull, far from it, but until you've done it and done it properly is really scary.  On top of that I also had an R investigation a few years back and am tankfull my then accounant had started me on the right road - I dred to think what would have happened if I had done my own books the first year.  I'd probably be taking a holiday in her majesties now !!!

Im not saying use an accountant every year of trading - just take advantage of them when starting up.  Once you see what can be claimed for and included all the bits w did not realize we can claim for DUMP THEM and save your self £250+.

Horses for corses Tosh i'm sure Paul will do what he feels comfortable doin'. Personally i am glad I used one ONCE and am confident in doin' my SELF ASSESSMENT myself nowadays (or the wife is !!!!!!)

[windows_chepstow]

Tosh you are forgetting some of us cant read or tipe so understanding a indusrty and all its technicalities that someone has trained 5 years for is beyond SOME w/c's.

I came to w/c from a manufacturing industry and aving worked in a factory all my working life I had no clue how to set up a P&L sheet let alone decide what 'tax deductable' was let alone if I could claim it.

Im not dull, far from it, but until you've done it and done it properly is really scary.  On top of that I also had an R investigation a few years back and am tankfull my then accounant had started me on the right road - I dred to think what would have happened if I had done my own books the first year.  I'd probably be taking a holiday in her majesties now !!!

Im not saying use an accountant every year of trading - just take advantage of them when starting up.  Once you see what can be claimed for and included all the bits w did not realize we can claim for DUMP THEM and save your self £250+.

Horses for corses Tosh i'm sure Paul will do what he feels comfortable doin'. Personally i am glad I used one ONCE and am confident in doin' my SELF ASSESSMENT myself nowadays (or the wife is !!!!!!)

Sarill,

I understand where you're comming from.  Wor Lass is dyslexic which can often be interpreted as 'stupid'.  She's very embarrassed about it, even though it's a very common thing, and wouldn't be at all happy about me posting it on this forum.

However, she's not stupid at all, has 120 points towards an Open University degree... it just takes a slighly different (and longer) method to complete what she wants to do.  If you gave Wor Lass a string of numbers to read; such as a phone number; it's an arduous task for her.  It's not that she's stupid; quite the opposite; it's just that the 'camera' in our brains that most people take for granted doesn't work for her.

If I dumped my 'books' on her and told her to sort it out; she'd flap like a good un.

All I can say, Sarill, is that you're bright enough to communicate your point on this forum (which you obviously are), therefore you're bright enough to get yourself down to the library and read up on self-assessment.  There's quite a few books, in lay-mans terms which will assist you in completing the 'complex' forms by yourself.

[Sarah Sarill]

Thanks Tosh - not used to being told I am bright - the wife usually calls me by a different name !!!! only joking she loves me really.

As long as we are both happy with the way we keep and submit our SA then who cares.  All the opinions and experiences aired on this thread will give Paul (the original postee) enough to make his decision on.

This forum is all about sharing w/c ideas on topics someone wants to discuss or needs help on and who says our own opinions are right anyway - someone out there may be doin' it better.  I'm learning a lot from this site and I am glad to share my experiences with anyone who askes for it .

[Paul Coleman]

- we tried to claim unprinted t-shirts and jeans when thats not acceptable either.

MMMmmm.  It's called SELF ASSESSMENT, so I do it myself.  I did consider getting an accountant and went to see a local one in his house.  (For the Chepstow lads, it was Andrew B........ in the Danes).  His house, although in a nice area was utterly filthy.  So was he.  There was piles of paper all over the place and he hadn't had his windows cleaned in years.  Inside it stank.

I didn't have the guts to tell him to his face that I had no confidence in him what-so-ever and although he was cheap (£120) I decided to do my books myself.

Get a book from a library; there's plenty in there about self-assessment for the self-employed and learn how to do it yourself.

Anything, including clothing that I purchase for the use of my business I class as 'tax deductable'.  However, I've not had a tax investigation: but if I did get one and found out the £30 quid's worth of t-shirts weren't; I'd just pay the tax-man back.

At the end of the day, we're window cleaners; and Self Assessment is meant to be done by your'self', as the name implies.  A little bit of knowledge can be 'streched' very far.

Get a book from the library is my advice!  It's not rocket science.  I believe HMS Tax Inspectors have better things to do than harrass hard-working window cleaners over a few quid spent on T-Shirts.

I reckon if you purchase clothing for work, then it should be tax-deductable.  When I was in the army I had my uniform given to me (apart from my Mess Dress; but I was only 'encouraged' to buy that).

Officer's, even though they generally earn more than soldiers get their Mess Dress issued for free!

The flimsy reason given was that 'Officer's' have to socialise to a particular 'level' because... well because - I can't even remember what the reason was.

Anyway, I had to fork out £600 for my Mess Dress after 13 years in the Army, when some bloody snot nosed 18 year old lieutenant - just out of university - got his at the tax payers expense.

Educate yourself and use it to your advantage is my advice!

Just keep in mind that if you've paid at least £600 in tax this year, it's only kept one wet-behind-the-ears officer looking smart in his 'getting drunk' uniform, and no doubt it'll be wrecked as soon as he gets crippled in the Sergeant's Mess when playing Mess Rugby.

There's no justice in this world when it comes to paying taxes.  All's fair in love and war as they say; including paying your taxes!

Rant over!

Tosh.  There is another way though it will probably cost you a day off work.
That way is to list the income with all its details.  List your expenses, the proportions, and keep the receipts.  Get your tax return and then phone the IR office to make an appointment.  They will spend time with you going through it with you.  Contrary to poular opinion, they are actually pretty fair with people who do it this way.  They don't like doing it though as they prefer you to use an accountant but they will do it with you.  Not sure about this but I think they are legally obliged to do this with you if you ask them.

[Sarah Sarill]

" I reckon if you purchase clothing for work, then it should be tax-deductable"

Just to pick up on this point Tosh I have just confirmed that if your 'work' clothing is unprintd or is not a specialist item (ie your uniform) then it CANT be claimed.

The golden rule (according to the IR man who assessed me ) is, and I quote " if it is plain and can be worn outside of work then you cant claim it ".  This means plain white t-shirts, jeans and even un-industrial footwear.


Paul , The shinner is right too - the IR is quite happy to do what he says and i've been told they do courses covering basic book-keeping and all aspects of PAYE etc and its free....................... Smetihing for nothing from the IR - that's gotta be good.

Good luck mate, choose whatever method and resources you feel comfortable with.

[Paul Coleman]

" I reckon if you purchase clothing for work, then it should be tax-deductable"

Just to pick up on this point Tosh I have just confirmed that if your 'work' clothing is unprintd or is not a specialist item (ie your uniform) then it CANT be claimed.

The golden rule (according to the IR man who assessed me ) is, and I quote " if it is plain and can be worn outside of work then you cant claim it ".  This means plain white t-shirts, jeans and even un-industrial footwear.


Paul , The shinner is right too - the IR is quite happy to do what he says and i've been told they do courses covering basic book-keeping and all aspects of PAYE etc and its free....................... Smetihing for nothing from the IR - that's gotta be good.

Good luck mate, choose whatever method and resources you feel comfortable with.

That's interesting about the free basic book-keeping course from the IR.  I may look into that when I have a bit more time to spare.
Also, my understanding of tax deductible clothing regulations is the same as yours Sarill.  I book one-piece boiler suits even without my name on it as that's a specialist item.  Also, I book protective footwear.  In years gone by I have booked trainers against tax too as I have used them for work.  Although it's never been queried, my argument would be that my protection lies in them being non-slip - i.e. under the trainer rather than on top.  However, I have occasionally slipped on wet rungs so I now use proper slip-resistant footwear with hard toecaps.
Regarding putting your name or logo onto clothing to make it tax deductible, do you think the taxman would object if I changed my surname to Gucci? 

[Sarah Sarill]

Good one The shinner - like your style !!!

Me wife keeps telling me to book her designer gear too but me somehow thinks the tax man wont allow the £400 LV bag I bought her for her 40th in June !!!!

The thing with the books is its ok till u get auditted and then on the first occassion you can plead ignorance but what then ?  I dont know who said the IR cant be bothered to investigate businesses like w/c but thats not true.  I have a SS fraud investigator living 3 doors from me and she secialises in smaller businesses and has followed round people like leaflet droppers, home nail manicurists etc - my point is dont assume we are seen as an industry that is too small to be investigated NOT TRUE we are the classic target because anyone can do it for a few weeks to earn some undeclared money whilst on the dole etc.

Unfortunately the wife is too honest with her book-keeping since our audit and wont even claim the cost of a stamp if it cant be proven as a business letter !!!

Great thread though Paul - you opened a can of w/c worms here (just like mine on Poaching new business).