[hank jr]

Hi all, can anyone tell me if what i am doing is ok for the tax man.

every week i record my earnings and record my expenses in a book.

i also have a weekly spreadsheet of the customers houses i have cleaned and how much charged. i put this sheet in my folder every week.

i also pay my earnings ( before expenses ) into my current account every week ( could not get business account due to poor credit)

is this good enough?

i dont really see any need to pay an accountant, im only a one man band....

[telfordwindowclnr]

Mate, honestly, pay an accountant even if you are a one man band. Because you are on your own, his bill won't be much. If you pay tax, pay an accountant. It's tax deductible anyway.

[Ian Lancaster]

If you record every penny of revenue (whether or not you actually collect it) and have invoices for every business expense and keep them in an orderly fashion, that will be enough.  You should also keep a separate record of actual moneys collected so that at the end of your year you can write off any bad debts.

On your purchase invoices it helps to allocate a number to each one as it comes in, then record it in your daily cash book under that number so you (and the tax man) can easily cross reference to see what outgoing in the cash book refers to what invoice.

I used this system for nearly 40 years with no problems

[telfordwindowclnr]

I agree wholeheartedly with Ian. I do know though that if the revenue are looking to investigate a window cleaner, they will probably go for the guy who does not have an accountant as opposed to one who does. Who is more likely to have an error?

[KS Cleaning]

I agree wholeheartedly with Ian. I do know though that if the revenue are looking to investigate a window cleaner, they will probably go for the guy who does not have an accountant as opposed to one who does. Who is more likely to have an error?

Have to disagree with you there Steve.HMRC will in most cases go after the bigger fish.If a sole trader is declaring a reasonable turnover to outgoings ratio, there is little chance of there being any major discrepancies worth investigating.An accountant will only proceed on the figures given to them by their client.

[mark dew]

Income and expenditure records are enough.
But once you start paying tax, the best money you will spend each year will be the accountants bill.
They pay for themselves and some.

[hank jr]

Income and expenditure records are enough.
But once you start paying tax, the best money you will spend each year will be the accountants bill.
They pay for themselves and some.

i dont earn enough to pay tax, the threshold is about 8 grand i belive and i earn under that. my only expenses really are fuel....

[dave0123]

Have to disagree with you there Steve.HMRC will in most cases go after the bigger fish.If a sole trader is declaring a reasonable turnover to outgoings ratio, there is little chance of there being any major discrepancies worth investigating.An accountant will only proceed on the figures given to them by their client.

wrong actually the HMRC go after small companies its easier to get them and don't have the money to protect them selfs.. why you think all these big companies pay no tax and get away with it. Yes accountants write down what u give to them but most of the time you give them all your receipts and invoices this is the best way for them to save you tax.. as at the end of year its a bit late.. its more likely for an accountant to do things and claim for stuff correctly than doing it yourself.. so if they are looking at someone to investigate who is it going to be?.. the fella doing his own return with no adviser. only takes them one small little thing and they will go back 5 years.

[SimonBurton]

There is actually no limit Howe far back they can go if they find something....

[Steve Sed]

Ignore the doom merchants. If you can manage the basic maths and you record all your spend in relation to your business an accountant won't save you money. If an accountant costs you £400 he will need to find £2,000 worth of costs to your business that you didn't find. Unless you are totally syupid, that is unlikely. However, if you don't want to do your own return or you find it too daunting, get an accountant. But it ain't difficult.

[AuRavelling79]

Ignore the doom merchants. If you can manage the basic maths and you record all your spend in relation to your business an accountant won't save you money. If an accountant costs you £400 he will need to find £2,000 worth of costs to your business that you didn't find. Unless you are totally syupid, that is unlikely. However, if you don't want to do your own return or you find it too daunting, get an accountant. But it ain't difficult.

What he said.

Or if your missus is a bit clued up get her to do it; especially if she isn't earning enough to pay tax herself - then you can pay her.

[Johnny B]

I record all takings and expenses in a ledger each day, and keep all receipts in date order in an envelope.

At year end tot up the totals, take one from t'other after taking into account personal allowance. It only takes a few minutes, and is so simple that I can't really see why I would need an accountant.

I like Ian Lancaster's idea of numbering the invoices. Most of my receipts fade into oblivion!   

John

[paulben]

Do it yourself just keep all paperwork for 6 years I keep expences in an expanding folder(about £2 from tescos) and keep daily record of earnings then just a case of taking one from other .Tax returns are nice and clear only takes minuetes to fill in .

[PoleKing]

I asked myself the same question when I started. I thought that if they cost me less than they save me i'd use an accountant.
Paid c. £300 11 years ago-dont pay much more now! Year one, I reckon they saved me an extra grand. I never worked it out after that.
Your accountants fees aren't tax deductible.

[KS Cleaning]

Have to disagree with you there Steve.HMRC will in most cases go after the bigger fish.If a sole trader is declaring a reasonable turnover to outgoings ratio, there is little chance of there being any major discrepancies worth investigating.An accountant will only proceed on the figures given to them by their client.

wrong actually the HMRC go after small companies its easier to get them and don't have the money to protect them selfs.. why you think all these big companies pay no tax and get away with it. Yes accountants write down what u give to them but most of the time you give them all your receipts and invoices this is the best way for them to save you tax.. as at the end of year its a bit late.. its more likely for an accountant to do things and claim for stuff correctly than doing it yourself.. so if they are looking at someone to investigate who is it going to be?.. the fella doing his own return with no adviser. only takes them one small little thing and they will go back 5 years.

Sorry,I said sole trader instead of  sole trader 1 man band.I wasn't talking about these big companies who try to avoid corporation tax,I was comparing a sole trader 1 man band(which the OP is) to a small company/sole trader who emloy.The small company/sole trader who employ being the bigger fish.
sole trader without accountant. himself + 1 employee  on 30 hours per week declares a turnover of £40 000
sole trader with accountant. himself + 1 employee on 30 hours per week declares a turnover of £25 000, Who do you think is more likely to be investigated??

[Ian Lancaster]

I asked myself the same question when I started. I thought that if they cost me less than they save me i'd use an accountant.
Paid c. £300 11 years ago-dont pay much more now! Year one, I reckon they saved me an extra grand. I never worked it out after that.
Your accountants fees aren't tax deductible.

Are you sure?  My accountant shows them as 'accountancy' in the expenses column.

They are a legitimate business expense, so should be deducted from profit prior to any tax calculation.

[hank jr]

Do it yourself just keep all paperwork for 6 years I keep expences in an expanding folder(about £2 from tescos) and keep daily record of earnings then just a case of taking one from other .Tax returns are nice and clear only takes minuetes to fill in .

i just have my weeks work on one spreadsheet and tick off who's paid as i go along. i have not been doing daily earnings, but i have just been totaling my earnings and expenses every week and then writing them in my book, and put fuel receipts in my little receipt folder.

do you bother writing invoices for every single residential customer??? i have not invoiced any residential customers as i was not aware that i needed to???

[shina]

Hi all, can anyone tell me if what i am doing is ok for the tax man.

every week i record my earnings and record my expenses in a book.

i also have a weekly spreadsheet of the customers houses i have cleaned and how much charged. i put this sheet in my folder every week.

i also pay my earnings ( before expenses ) into my current account every week ( could not get business account due to poor credit)

is this good enough?

i dont really see any need to pay an accountant, im only a one man band....

its alright for some. When I go to the bank all they keep going on about is me getting a business account.

[shina]

Do it yourself just keep all paperwork for 6 years I keep expences in an expanding folder(about £2 from tescos) and keep daily record of earnings then just a case of taking one from other .Tax returns are nice and clear only takes minuetes to fill in .

i just have my weeks work on one spreadsheet and tick off who's paid as i go along. i have not been doing daily earnings, but i have just been totaling my earnings and expenses every week and then writing them in my book, and put fuel receipts in my little receipt folder.

do you bother writing invoices for every single residential customer??? i have not invoiced any residential customers as i was not aware that i needed to???

You invoice commercal or those who work from home and request an invoice, other than that when you get paid from a residental custy then that is it. You should leave a slip to say that the windows were cleaned and payment details etc but not an invoice

[Ian Lancaster]

Do it yourself just keep all paperwork for 6 years I keep expences in an expanding folder(about £2 from tescos) and keep daily record of earnings then just a case of taking one from other .Tax returns are nice and clear only takes minuetes to fill in .

i just have my weeks work on one spreadsheet and tick off who's paid as i go along. i have not been doing daily earnings, but i have just been totaling my earnings and expenses every week and then writing them in my book, and put fuel receipts in my little receipt folder.

do you bother writing invoices for every single residential customer??? i have not invoiced any residential customers as i was not aware that i needed to???

[/color]

No.  The invoices are for expenditure, not income = everything you buy/pay for out of your business money should be supported by an invoice.