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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 8993
Experience:  FCCA FCMA CGMA ACIS
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I'm trying to understand the first Tax Return my Accountant

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I'm trying to understand the first Tax Return my Accountant submitted for me in 2012/13. I don't have the accountant anymore but I do have the Return and the Spreadsheet with which they compiled the data. Can anyone help?
Customer: replied 7 months ago.
This was my first year trading as a musician in which I backdated lots of items I already owned (instruments etc)
I'm confused as to why the Total Expenditure on the Accounts YE doc don't match the allowable expenditure on the tax return. Am I missing something?

Is there any capital expenditure in the accounts eg new instruments?

Customer: replied 6 months ago.
Hi Thanks for picking this up.
Yes there is. Some studio equipment
Customer: replied 6 months ago.
I think I've worked it out actually. I figure its todo with adding the depreciated value of the new equipment?
Customer: replied 6 months ago.
In the Sole Trader Accounts YE doc its displaying (expenditure - cost of sales) + depreciation
In the Tax return its just all expenditure including cost of sales
Customer: replied 6 months ago.
Another question I have is regarding box 32 -34 on the Tax Return I'm not sure where the figure 575 in box 34 has come from. Could you also help with this?

Not correct, depreciation and tax have nothing to do with one another. You should have claimed Capital Allowances and your Annual Investment Allowance (AIA), ie the cost of the new equipment, ia allowed at 100%.

Customer: replied 6 months ago.
I believe this was the case and that total is in box 22 in the attached Tax Return.
Depreciation is more to do with the balance sheet, am I right?
Customer: replied 6 months ago.
I think I was getting confused because the "Sole Trader Accounts YE" doc is showing expenses in regards ***** ***** Balance Sheet and the Tax Return shows expenses in regards ***** *****

Yes depreciation is a way of charging an asset over its anticipated working life. For taxation capital allowances rule, OK!

Customer: replied 6 months ago.
Thank you.
I'd apprecite it if you could help me with my last question: What is the "Loss from this tax year set off against other income for 2012–13?" a figure of £13174
I had 2 PAYE jobs at the time in which I earned around £21K and paid about £2.5k in Tax..

It is highly likely that two tax offices were both giving you a personal allowance resulting in an under deduction of tax and this was the resultant recovery.

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Customer: replied 6 months ago.
Thank you. So it appears that since I earned £21267 from my PAYE work, made a loss of £13749 in starting the business (leaving £7518) and the PA treshold for 12/13 was £8105 that means the "loss to carry forward after all other set offs" is £575 as that brings it (almost) up to the threshold... just shy by £12

That would appear tobe the vase.

Thank you for your support.