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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4937
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I'm in the process of completing my son's tax return

Resolved Question:

Hi ,
I'm in the process of completing my son's tax return for 2013-14 with him. He is a self employed musician, this is year 3 since he started and I'm finding it difficult to locate receipts for all expenses associated with his business this year. For example consumable like guitar strings and amp cables, i tunes (of which we claim a proportion) I've realised he has relied on the fact that most of these are paypal purchases with an electronic record.This situation has become much more the case for 2013-14 tax year than ever before as he has become busier. He travels huge distances performing and has very little time to capture paperwork. I've explained that for 2015-16 although he will he engage a professional accountant but he will still need to provide the evidence of claimable expenditure .
My questions therefore are these;
1. His business is not VAT registered as turnover is insufficient so he does not claim VAT. Therefore is a paypal transaction record (hard copy) admissible as evidence of an allowable expense in the event of an audit?
2. If an occasional function gig for example is payed in cash, i.e the client doesn't invoice or provide paper record, what does HMRC accept as evidence to income ? I should say here that the bulk of his regular income is from three teaching jobs, all payed via BACS with proper paperwork.
3. Lastly I would like to attach a copy of an example of the spreadsheet I use per month as his 'books' just to reassure myself I have captured the information in an acceptable way in the event of an HMRC audit.We don't submit theses at present opting instead to submit the simplified profit/loss account on the return , however as his business has grown in complexity I'm sure an accountant would opt to submit detailed accounts.
Thanks and regards
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question My questions therefore are these;1. His business is not VAT registered as turnover is insufficient so he does not claim VAT. Therefore is a paypal transaction record (hard copy) admissible as evidence of an allowable expense in the event of an audit?[a] A record of payment (paypal transaction record) is admissible 2. If an occasional function gig for example is payed in cash, i.e the client doesn't invoice or provide paper record, what does HMRC accept as evidence to income ? I should say here that the bulk of his regular income is from three teaching jobs, all payed via BACS with proper paperwork.[a] You should prepare a schedule of all income received whether there is an invoice/paper record of work done or not.. this should support all income reported. HMRC need to be satisfied that all income is disclosed in the event of an enquiry. 3. Lastly I would like to attach a copy of an example of the spreadsheet I use per month as his 'books' just to reassure myself I have captured the information in an acceptable way in the event of an HMRC audit.We don't submit theses at present opting instead to submit the simplified profit/loss account on the return , however as his business has grown in complexity I'm sure an accountant would opt to submit detailed accounts.[a]You only need to provide supporting documents/accounting records if there is an enquiry. You should for business sake, maintain good records for showing all income and expenses.In the old days, one would submit detailed accounts.. under self assessment you complete supplementary apages SA103F or SA103S instead.I will be happy to look at your spreadsheet if you wish to attach it. I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 1 year ago.

Hi

many thanks, ***** ***** very clear.

I attach to sample spreadsheets. This is the way we have been keeping records but as the business has become more complex the expenses is starting to run on to 2 pages. I have picked just 2 sample months and attach pdf's here

Attachment: 2016-01-25_103645_june2014-15.pdf

Attachment: 2016-01-25_103717_february_2014-15.pdf

Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply and for the spreadsheetsAs an accountant, I could not ask for more..You may already be doing so but as a suggestionprepare a summary sheet that would show the total for the year and use that to input figures in the tax return.If you get stuck, I will be happy to do one for you and you can use it for future use.I hope this is helpful and answers your question.
Customer: replied 1 year ago.

That's good news, yes we do a summary sheet like thee attached. As we are working through this today and tomorrow if I may revert to you should another question arise that would be very helpful.

I think 2015-16 will be the first year we actually hand over to an accountant , could you give me a rough idea on what my son should expect to pay for that service per year?

thanks and regards

Phil Watson

Attachment: 2016-01-25_104824_summary_sheet.pdf

Customer: replied 1 year ago.

Shall I input the rating now ? If so can I ask another question later on this thread if I need to. Apologies for the ignorance I'm not 100% sure how the protocol works

Best Regards

Expert:  taxadvisor.uk replied 1 year ago.
Phil, thank you for your reply.I will send you my version of summary sheet soon.If there are no more issues, I will appreciate if you would kindly rate my service/accept the service I have provided before you leave the site, to ensure I get credited for it by Just Answer.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4937
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.Spreadsheet for your considerationIf you have any questions and wish me to help you, please refer to me in the body of your question. Many thanks Many thanks

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