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briljant oranje · 12-02-2006, 16:52

What do those of you that are self employed do in terms of keeping records for the tax man ?

we've got a business account, and just keep a record of stuff we buy for the business, and the money we get paid. and thats all.

it feels like we're missing something.

can our business bank account be used for personal stuff too, as long as the books balance in terms of income and expenditure ?

oli · 12-02-2006, 17:02

Im just starting out myself but I would definately keep business and personal separate. And get an accountant

datahound · 12-02-2006, 18:13

Don't use business account for personal. Take the lumps you need to live as drawings regularly and transfer that to personal account to spend.

briljant oranje · 12-02-2006, 18:19

the main reason i'm asking is that me and my creative partner are moving to a city centre apartment that we're gonna live at and work from - we're setting up a studio there.

we were wondering if we used our shared business account to set up a dd to pay the rent and utilities this would cause a problem legally ?

i know it's best not to use business accounts for personal stuff, but was wondering if it causes legal probs regarding the tax man ?

datahound · 12-02-2006, 18:48

The issue here is whether or not the apartment is a legitimate business expense. As you are living there as well the taxman would probably say no. As I understand it you are able to claim a percentage of the costs as expense. Say 8 working hours, 33%. You may wish to claim for more if you are prepared to state if investigated that you work 16 hours trying to get the business off the ground, 66%. I would speak to an accountant about this but I am fairly certain that is the case. If you pay those expenses out of the business account make sure to keep a tally of the total for them, then at the end of the year you can adjust the figure for what percentage are allowable expenses for tax porpoises.

mike_m · 13-02-2006, 06:19

It's very hard to convince the tax man that your house is your office - especially if there's an open plan area that mixes work and living - it's easier if there's a seperate room that is definitely an office to show them.

Haha, you're going to live together and work together - I guarantee you'll be calling each cunts behind each others backs and snapping like grouchy crocodiles within the month

mike_m · 13-02-2006, 06:20

also, regarding accounts - are you setting up a limited business with VAT etc.? If so, then get hold of sage instant accounts - it will make your life much easier when it comes time to give the accounts to your accountant.

12-02-2006, 16:52	#1 (permalink)
briljant oranje Keep it foolish yeah? Join Date: Mar 2005 Location: Not Leeds Posts: 573	Bank Accounts and Bookeeping What do those of you that are self employed do in terms of keeping records for the tax man ? we've got a business account, and just keep a record of stuff we buy for the business, and the money we get paid. and thats all. it feels like we're missing something. can our business bank account be used for personal stuff too, as long as the books balance in terms of income and expenditure ?

13-02-2006, 06:19	#6 (permalink)
mike_m Work faster microphone .. Join Date: Feb 2003 Location: Cambridge, UK Posts: 1,706	It's very hard to convince the tax man that your house is your office - especially if there's an open plan area that mixes work and living - it's easier if there's a seperate room that is definitely an office to show them. Haha, you're going to live together and work together - I guarantee you'll be calling each cunts behind each others backs and snapping like grouchy crocodiles within the month __________________

13-02-2006, 06:20	#7 (permalink)
mike_m Work faster microphone .. Join Date: Feb 2003 Location: Cambridge, UK Posts: 1,706	also, regarding accounts - are you setting up a limited business with VAT etc.? If so, then get hold of sage instant accounts - it will make your life much easier when it comes time to give the accounts to your accountant. __________________

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12-02-2006, 17:02	#2 (permalink)
oli Free Ring Ding™ Join Date: Feb 2003 Location: Manchester Posts: 9,523	Im just starting out myself but I would definately keep business and personal separate. And get an accountant

12-02-2006, 18:13	#3 (permalink)
datahound Spare Parts Join Date: Jan 2005 Location: Bracknell Forest Posts: 4,620	Don't use business account for personal. Take the lumps you need to live as drawings regularly and transfer that to personal account to spend.

12-02-2006, 18:19	#4 (permalink)
briljant oranje Keep it foolish yeah? Join Date: Mar 2005 Location: Not Leeds Posts: 573	the main reason i'm asking is that me and my creative partner are moving to a city centre apartment that we're gonna live at and work from - we're setting up a studio there. we were wondering if we used our shared business account to set up a dd to pay the rent and utilities this would cause a problem legally ? i know it's best not to use business accounts for personal stuff, but was wondering if it causes legal probs regarding the tax man ?

12-02-2006, 18:48	#5 (permalink)
datahound Spare Parts Join Date: Jan 2005 Location: Bracknell Forest Posts: 4,620	The issue here is whether or not the apartment is a legitimate business expense. As you are living there as well the taxman would probably say no. As I understand it you are able to claim a percentage of the costs as expense. Say 8 working hours, 33%. You may wish to claim for more if you are prepared to state if investigated that you work 16 hours trying to get the business off the ground, 66%. I would speak to an accountant about this but I am fairly certain that is the case. If you pay those expenses out of the business account make sure to keep a tally of the total for them, then at the end of the year you can adjust the figure for what percentage are allowable expenses for tax porpoises.

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