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Sam, Accountant
Category: Tax
Satisfied Customers: 14166
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Good day, advice please. I retired at the end of 2012 and

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Good day, advice please.
I retired at the end of 2012 and have as income my State Pension and a Company Pension,
during the last year I have carried out business visit for a Company who pay me an inclusive fee following an invoice from me for the visits done.
The fee does not include any expenses but I incur fuel costs, telephone and broadband costs and some minor costs for consumables.
All administration work is done online from my home. The total gross income from this enterprise will be between £4,000 and £5,000 this year, it was half as much last year.
What sort of "Accounts" do I need to compile and how do I communicate the outcome to HMRC please.
Am I best advised to involve a professional accountant.
Thank you

Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer,

First you should register as self employed with HMRC and ideally this should have been undertaken within 3 months of starting his work.
This will ensure that after 05/04/2014, HMRC can expect a self assessment tax return form you - on which you should declare ALL income (so self employment/pension and state pension)

As for records to keep so you can prepare accounts, you already have the details relating to income, from the invoices you have raised so this will form the monies earned, and make sure you keep the corresponding bank statements in which this money has been paid.

For expenses - you also need to keep documentation, so as you work from home so lets look at this
1) Travel - as you use your own car, and work from home,. every visit is one considered as business mileage, so keep a record of the mileage undertaken - you then have a choice whether you claim the travel expenses as the mileage method, which allows 45p mile for the first 10,000 miles, and then 25p a mile thereafter - OR the actual method, which requires you to keep records of both business mileage AND the total mileage, so the % attributable to business can be established, so say 50% is business, then you could claim 50% of ALL the running costs (so fuel, MOT, Road tax, repairs, Insurance etc) plus the car can be treated as a capital allowance - and the same % claimed for the depreciation of the vehicle (let me know if you want to go down this route - along with the value of the car and the Co2 emissions, and I can give you an example)
2)Telephone and broadband costs - for telephone you must have an itemised bill, so you can identify the business calls made, and when compared to the total calls made you can then apply this business % to the line rental AND also claim the business calls, Broadband, you should establish a reasonable cost that covers the business element, and when doing this also take into account, any private use of yours, and that of other household members.(so keep all bills) and if you have an email or website - then this also forms into the broadband costs - but setting up of the website can also be claimed
3) Premises, if you have a room set aside, then you can claim heating and lighting costs, so let me know if this is the case, if you do not have a room set aside just for business - then a standard £3 per week can be claimed, to take into account additional costs
4) Advertising - as I assume you work for more than one business (or at least intend to) or HMRC may argue you should in fact be an employee of this one client, rather then self employed!
5) Any professional insurances, or subscriptions, that tie in with your business
6) Accountancy costs (which includes the fees for using Just Answer)
7) Admin - stationary - pens, stamps

Then finally business equipment - although this is claimed differently (as falls under the capital allowance regime, so again let me know if this applies to you, and advise what you have bought)

As for the sort of accounts to keep, you can prepare a monthly spreadsheet detailing what's come in and what's gone out - or you can buy an accounts software package (but needs updating annually and not very cheap - but an allowable expenses cost) or an exercise book - listing ins and outs, whatever is easiest for you.

Then after each 5th April you record all income - and with the self employment - the income and expenses - and then HMRC calculate any tax due and this paid the following 31st Jan (but if you get your tax return in by the 30 Dec - then you can ask for any unpaid tax to be collected through your PAYE code - if there are sufficient allowances and income!)

There is no need to have an accountant to undertake this for you, but you might prefer this, but shop around, as they vary is their fees! (Even if you only get them to undertake the submitting of the tax return for you)

That's the gist of it, but let me know if you have any follow up questions, or need more information on any aspects detailed above.


Customer: replied 4 years ago.

Hi Sam,

Thank you for your prompt and informative answer, at the very least it gives me a "Starter For Ten".

I will be sure to ask again if I need further details



Hi Rowland
You are very welcome and it would be appreciated if you could rate/accept as this ensures I am credited for my time


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