Making tax digital

[Truckcab79]

Did a survey for RBS today. Looks like card readers will be obsolete fairly soon. Going by them it seems we will all be using our smart phones to collect payment. ?

Probably right. Won’t miss it. I have a SumUp card reader because the only cost is the 1.6% on the transaction. Nothing monthly etc. Used it three times I think. 99% of my payments are bank transfer. Cash is almost unheard of at least for me.

 

[steve garwood]

Twice on this thread it’s been mentioned that two grand is being paid per year to their accountant.
That’s utter madness. Been in this game thirty odd years and never once paid over four hundred quid.
I’m happy paying that as he does my self assessment stuff and it’s nice knowing that any helpful information is only a phone call away ???‍?

 

[ched999uk]

Correct and it’s the ‘overseeing’ I’m loathe to lose to be honest. That and the fact I pay ‘insurance’ to her so that if I get investigated she handles the whole process as my agent, and pays/reimburses any fine due to her error or advice.

Are you sure that's what the 'insurance' you pay covers? The ones my accountant offered just covered their time to assist in the investigation, there was no cover for fines!

If you think you are going to hit the threshold (I'm not sure you haven't already as how can you 'move a £30K payment when surely it went into a bank account!' so it's traceable, then I think it might be worth checking out the 'Flat Rate Scheme' although you must spend quite a bit on materials so maybe that won't be good for you?

I would be looking round for a better accountant as they should be assisting you either stay under the VAT threshold or registering before you hit the limit as you need to be adding Vat to your quotes before you hit it otherwise you will be out of pocket!!

 

[ched999uk]

Full marks to you my friend. You’ve pretty much word for word said the same as one of my HMRC clients. She said it needs to be distinctly different but a landscaping business and a handyman business would almost certainly fit the criteria of being two legitimately separate businesses. I’ve already emailed my accountant to query exactly that.

I don't think 2 businesses can use the same equipment or vehicles otherwise it can be classed as Tax avoidance! Having a 3rd company that leases the equipment out may be possible but I'm not an accountant .

 

[Pjj]

Twice on this thread it’s been mentioned that two grand is being paid per year to their accountant.
That’s utter madness. Been in this game thirty odd years and never once paid over four hundred quid.
I’m happy paying that as he does my self assessment stuff and it’s nice knowing that any helpful information is only a phone call away ???‍?

Think that 2 k will includes vat returns , and possibly paye stuff .

 

[Part Timer]

Full marks to you my friend. You’ve pretty much word for word said the same as one of my HMRC clients. She said it needs to be distinctly different but a landscaping business and a handyman business would almost certainly fit the criteria of being two legitimately separate businesses. I’ve already emailed my accountant to query exactly that.

You will need different Directors, different vans etc etc. If there is any overlap they will use it as evidence of avoidance

 

[Truckcab79]

Think that 2 k will includes vat returns , and possibly paye stuff .

Nope. Bog standard tax return albeit I’ve been a bit disorganised and dumped it all on her as a CSV file but all the work to produce it and highlight everything as materials, tools, tools over £1k, subbies labour, whatever, was produced by me

Basic tax return last year was £1200. This year £1850 with the extra being fairly vague ‘additional services to prepare return’ or something.

I regularly see adverts for £250-400. I don’t mind expensive if the service is exceptional but I think I’m being fleeced a bit and the extra was just because my turnover had jumped. Think she thinks shes on a percentage. ?

With her because two of my mates already were. Reckon I’ll be changing though it probably makes sense to stick with her for this year while I decide whether LTD works better for me, VAT liability etc etc.

 

[Iron Giant]

I’m basically sole trader, £135k turnover in last tax year.

Just to clarify, as I should have done originally, I’m aware of the VAT threshold and as it’s a rolling 12 months I had two £30k patio jobs in the last reported tax year and the accountant moved the payment of the second one into the following period to keep me just below.

If your turnover was 135k but your accountant moved 30k over to the following period then that's a difference of 105k left over so you are 20k over the vat threshold, am I missing something or is your accountant

 

[Truckcab79]

You will need different Directors, different vans etc etc. If there is any overlap they will use it as evidence of avoidance

Possibly. I had this discussion with the HMRC inspector (albeit no longer working with them). She seemed to think so long as you were offering two very distinct services it was doable and more so if you charged different rates for each. Apparently that would hold more weight than premises / vans etc.

Sounds too good to be true be worth discussion.

 

[Truckcab79]

If your turnover was 135k but your accountant moved 30k over to the following period then that's a difference of 105k left over so you are 20k over the vat threshold, am I missing something or is your accountant

Rolling 12 months. I’m not explaining it properly. £135k was my ‘22 tax year but the current (at that point), ongoing rolling twelve months with £30k moved out took me below the VAT threshold apparently.

Doesn’t sound right when I say it out loud but that’s probably why I need to get Sage or similar and have a better handle on it.

 

[Iron Giant]

Rolling 12 months. I’m not explaining it properly. £135k was my ‘22 tax year but the current (at that point), ongoing rolling twelve months with £30k moved out took me below the VAT threshold apparently.

Doesn’t sound right when I say it out loud but that’s probably why I need to get Sage or similar and have a better handle on it.

Sage is just accounting software, not a tax adviser

 

[Truckcab79]

Sage is just accounting software, not a tax adviser

Indeed. But from what I can gather used properly it puts together all the information you need to then do your tax return fairly easily. (And I appreciate Sage is not necessarily the only or the best one, but it’s the one this accountant wants you to use) My mates with the same accountant already use it and are questioning why they’re paying a monthly fee for the software to make the accountants life easier to then be charged 2 grand for submitting the information to HMRC. ?

I’m with her and as said will stay at least for this year precisely as it’s the advice I need more that the return.

 

[Cghwindowcleaning]

No disrespect but 2k for a sole trader self assessment non vat and non limited is absolute day light robbery.
I would expect you to be paying an accountant no more than £400.00

You say you are staying with her for the advice but from what you have said her advice in my opinion doesn’t sound great.And every account should be advising you as that what your paying for not a book keeper.

Making tax digital is not for another 3 -4 years and that will probably be pushed back so making you change to sage or quickbooks will just make her life easier and be no real benefit to you.

You can set up two different companies as it sounds like you do building work so you have reason to differentiate between that and cleaning.However if it is building work you do it may benefit you to go vat registered as that will be very material heavy and you can claim the VAT back.

 

[Pjj]

Nope. Bog standard tax return albeit I’ve been a bit disorganised and dumped it all on her as a CSV file but all the work to produce it and highlight everything as materials, tools, tools over £1k, subbies labour, whatever, was produced by me

Basic tax return last year was £1200. This year £1850 with the extra being fairly vague ‘additional services to prepare return’ or something.

I regularly see adverts for £250-400. I don’t mind expensive if the service is exceptional but I think I’m being fleeced a bit and the extra was just because my turnover had jumped. Think she thinks shes on a percentage. ?

With her because two of my mates already were. Reckon I’ll be changing though it probably makes sense to stick with her for this year while I decide whether LTD works better for me, VAT liability etc etc.

Dear me that’s expensive then ??

 

[Truckcab79]

Dear me that’s expensive then ??

Wish I’d never asked now. ?. I blame my mates who use her. Didn’t even ‘shop around’.

 

[Nosey]

I use and app called coconut. It’s an app on my phone where I can add a client and invoice them. It now costs £9 per month as they’ve put it up recently. But you can link it to multiple bank accounts. Select which is business use and categorise incomings and outgoings it. It constantly estimates your tax cost. So you know what you owe as the year goes on. I’m only a sole trader but it works well. I give this to my accountant who only charges 300. It’s prob about 10 mins works for them. I could submit it direct to HMRC.But at least I know my accountant are keeping an eye on my books and keeping me upto date. I’m pleased with it and would recommend.

 

[Truckcab79]

I use and app called coconut. It’s an app on my phone where I can add a client and invoice them. It now costs £9 per month as they’ve put it up recently. But you can link it to multiple bank accounts. Select which is business use and categorise incomings and outgoings it. It constantly estimates your tax cost. So you know what you owe as the year goes on. I’m only a sole trader but it works well. I give this to my accountant who only charges 300. It’s prob about 10 mins works for them. I could submit it direct to HMRC.But at least I know my accountant are keeping an eye on my books and keeping me upto date. I’m pleased with it and would recommend.

Cheers. I think thats probably all
I need. Does it photograph and store receipts etc.

 

[steve garwood]

Dear me that’s expensive then ??

Told ya ??

 

[Nosey]

Cheers. I think thats probably all
I need. Does it photograph and store receipts etc.

Yes it does receipt capture. So everything is stored in one place. Obviously if you have employees etc then your best going for something like xero which is more expensive but prob worth its weight in gold.

 

[Truckcab79]

Yes it does receipt capture. So everything is stored in one place. Obviously if you have employees etc then your best going for something like xero which is more expensive but prob worth its weight in gold.

Cheers. No direct employees currently. Have a guy who works for me equivalent of about 5 months a year but made him register as a sole trader so he just invoices me and keeps jt all above board.

 

[Part Timer]

Cheers. No direct employees currently. Have a guy who works for me equivalent of about 5 months a year but made him register as a sole trader so he just invoices me and keeps jt all above board.

Not quite as simple as that, if he works set hours, under your instruction and using your equipment he will be, in HMRC eyes, classed as an employee. He needs to have other streams of income, not just another job. You will also need employers liability insurance.
If he works on his own using his equipment then that is fine.