Receipts - Confused!!

[debbie]

Hi everyone,

I know that you don't need to provide receipts under £10 if you are earning less than £15,000 but how do you know if you will be doing that over a year?? Also is it classed as earning over £15,000 if you say earn £16,000 but have expenses of say £6,000 so actually only taxable amount is £10,000 or is it only if you earned £22,000 (no chance I know!!!) and after expenses come out with £15,000?

Sorry if this is confusing!!

Thanks Debbie

[sarahnev707]

If you think you might need to keep your receipts - keep them! Just make sure they're in month order and you can get rid of them easily in April when you do your books!!!

Sarahx

You shouldn't need to though..... your expenses should take your earnings down by about 2/3 so you'd need to be on £45k to be declaring £15k after deductions!!!! In which case we're all coming round to yours for the party !! LOL

[susi513]

Unfortunately its your turnover (ie, your income before you take off your expenses) that counts and not your profit. I've realised I now fall into this category. I have kept a lot more receipts than I needed to previously but there are going to be a lot of expenses I don't have receipts for. NCMA book says to make a note of what you bought, the date, cost & where you bought it. It doesn't say anything about credit card statements but I would keep any that show business purchases and write on it what you actually bought.

NCMA book also says you can still claim the wear & tear allowance but doesn't mention the fuel/council tax etc. Does that mean I can't claim them any more?

[charleyfarley]

You can still claim for heating/lighting and council tax, it's in the front of NCMA Accounts Book

Carol xx

[debbie]

So sarahnev said it is after expenses (£45k per year so no chance of that!) and Susi said it is before expenses - please can anybody confirm which it is or should I just keep every little receipt?

Who invented tax!!!!

Debbie x

[tasha]

If it's under £10 you don't have too keep them. However it is always helpful to have a few to prove yourself should you ever get investigated (they go back 6 years in an investigation) & everyone will be investigated once in their lifetime!. Hope this helps!
Tasha
PS It's after expences( page 3 NCMA Members Handbook -3, Tax, Benefits & NI, in the income tax section).

[cheryl1]

just to clarify do we have to do full accounts for gross earnings over £15.000 or nett earnings over £15.000.

also do we have to use an accountant or can we do the books outselves and can we still use the ncma accounts book if we have earnings over £15.000 gross per year ?

totally confused ?

[tasha]

Can you clarify what you mean by full accounts? I use the NCMA accounts book & simply fill it in! I then complete a tax return. The NCMA handbook I mentioned in a previous post states on page 3 that you will be assessed for tax on your net profit. If this is under yout personal allowance £5035 this year & childminding is your only source of income then you will not have to pay tax. So your gross income would have to be £15,000 before you have to pay tax. I think you where refering to tax returns as on page 4 of the handbook it says that if you have an annual turnover of under £15,000 you need only submit a three line statement of accounts when submitting your tax return to the Inland Revenue ie the back page of the NCMA accounts book. However, you still need to keep a complete record of accounts (ie NCMA accounts book & receippts). So if you earned more you would have to haveto do a more indepth return. Regardless of the ammount earned using the NCMA accounts book & keeping receipts is sufficient. You can either do it all yourself - I do my own - it's not difficult - if you follow the instructions in the front of the NCMA accounts book & use the handbooks for guidance. You can if you wish use an accountant. I really don't think I can explain it all much more. Hope your not confused now!
Tasha

[jules]

I phoned NCMA as I was confused.

They told me your annual turnover figure that you put on your tax return is your gross figure (before expenses) less your 10% wear and tear. You then deduct your expenses which leaves you with your net income.

The problem starts if your annual turnover (gross-wear and tear) is over £15,000, you have to fill in a longer tax return which looks really confusing.

Luckily I have managed to keep my annual turnover figure to just short of £15,000 which means I only have to do the short tax return. Next year however, I think I will probably be earning more and will probably need an acocuntant to explain what figures I put where.
Jules

[saira172]

I've submitted the longer tax return - not through earning lots but having a paper round registered in my name (they pay more for adults than children!!)

It's really not too scary - if you do it online. Just remember to register with the inland revenue in good time as it takes a couple of weeks for the password etc to come through. You can come back to it at any time and it won't let you carry on if you've missed bits out.

Saira



[quote author=jules board=tax thread=1190964410 post=1191059113

The problem starts if your annual turnover (gross-wear and tear) is over £15,000, you have to fill in a longer tax return which looks really confusing.

[/quote]

[mel]

I think if you are close to the 15k mark it is worth keeping the extra receipts just in case.

Mel x