- Normally, as a sole trader you need to prepare your annual accounts
in order to prepare your self assessment tax return and maybe to secure
external finance.
- Thus as it is a process you do not want, we will try to make it as
easy as possible for you by having one meeting to discuss both the
accounts and your tax return.
- Regarding the layout of your annual accounts, as they are your
accounts within reason we can formal those to show the information you
require to manage your business.
- If you do not need a special format we suggest that you use the same
headings as on the tax return pages or continue to use the ones you use
now.
- In addition to preparing your accounts you also need to prepare a
tax computation which effectively converts your Accounts prepared under
accounting standards to the tax rules. Some of the adjustments are as
follows:
·
- Depreciation – Businesses set their own
rates of depreciation depending upon the expected life of that type of
asset that is computers – expected life expectance is short therefore
high depreciation rate. However HMRC will only allow specific
percentages, in tax speak these allowances are called Capital allowances
of which there is various types.
- Entertaining – for tax purposes these
costs are disallowed, how from an accounts view point it is important
that these costs are incorporated into your accounts.
- Private usage – as a sole trader or
Partner it is likely that you will need a car to use in the business.
Therefore as that vehicle will have a non business element it is
important that the costs of running the car are kept separate from other
travelling expenses. Then an adjustment can be made on the tax
computation for the private use.
- Contact us; we will prepare your annual accounts in a timely manner
ready for your self assessment tax return.