any book keepers/accounatnts/tax people out there

[gothicmama]

Dh has become self employed ( hurray he has job with day time hours ) but what records do we need to keep - he is on CIS scheme so some tax is deducted and we have applied to pay NIC (class2) but reading through the inland revenue info he can claim expenses back againt his tax - but it does not say what he can claim - can someone help us not get in a mess - we can nt afford to see an accountant yet and would like to be a bit self suffincent - i assume he can claim for tools, work clothes but what about phone calls/ stationery. any help gratefully received

Phone calls and stationery should be tax deductible if for the business. I'm no expert on income tax but would advise him to keep an eye on his turnover to check if he needs to register for VAT

His tax deductions depend on what CIS he is - If he is a CIS 4 he will have 18% tax deducted from his labour but not materials, van etc etc - I'm not up to speed on what he can calim for but he should show on his invoices what is labour and what is materials.

You need to keep copies of all invoices, receipts etc etc - if you do nothing else make sure you do this as a accountant will be able to draw up accounts from these - even if it's at a later date. I think invoices are supposed to be kept for 6/7 years minimum but don't quote me on that.

I work for a construction company as the finance manager so I'll be as helpful as possible.

I am an accountant although since having DS my brain seems to have gone on holiday.

What it can remember is that if you are self employed, to be able to claim back expenses, they need to be "wholly and exclusively" to do with your business.

So phone calls made for business can be claimed, although I'm not sure about phone rental, as you would also use that for non business use. Stationery could also be reclaimed. Tools, work clothes etc would be fine as well.

I hope there are some tax people around to confirm what my brain vaguely remembers....

Turnover needs to exceed something in the region of £50k I think to need to register for VAT. Have to admit I don't know about the CIS scheme.

angelpoppet he is cis 4 I will make sure he keeps copies of everything - I was a bit worried about having a huge tax bill arrive thank you fo ryour help and you tinker

It's about 58k now - would need to look this up now

When your dh receives a payment from other CIS registered companies he should get a CIS 25 voucher. This will show the inland revenue how much has been deducted from his payment in respect of labour.

I would be very careful to keep a good record of these as you have to fill out returns at the end of the tax year and they can be a complete pain if they dont reconcile.

You probably already have them but I have these booklets in my office and quite often use them as a reference guide. They are

IR40 (CIS)
IR14/15 (CIS)

They are available to download from this website:-
www.inlandrevenue.gov.uk/

Things are a bit different where I work as we are registered as a CIS 5 but they may provide some help for you.

Thanks again - Tinker I don nt think he will earn taht much but I can dream.
Angelpoppet I will get him to chase up vouchers as he has not had any yet

Sorry to go on about it but just to remind you that that (the 58k) is turnover not profit.