New business startup - help!


J

Jay

I've just started a new business after always being an employee.

Sole trader doing computer and network support.

I have a fair understanding of the (extreme) basics of book keeping
but...

I am starting up from nothing. I have a home computer and a laptop
that I am using for my work, I use the home phone, I use the desk in
the front room, I use the family car etc etc etc. I have some basic
tools. How do I work out how much of (e.g.) the phone bill, electric
bill, etc etc that I can charge to the business?

How do I value things I already have (e.g. the computer and the car)
for depreciation etc?

I am guessing the answers may be along the lines of "you get your
accountant to do this for you". How much is an accountant likely to
charge? (And how long is that piece of string?) :)

tia

jay
 
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P

Pete_O

I've just started a new business after always being an employee.

Sole trader doing computer and network support.

I have a fair understanding of the (extreme) basics of book keeping
but...

I am starting up from nothing. I have a home computer and a laptop
that I am using for my work, I use the home phone, I use the desk in
the front room, I use the family car etc etc etc. I have some basic
tools. How do I work out how much of (e.g.) the phone bill, electric
bill, etc etc that I can charge to the business?

How do I value things I already have (e.g. the computer and the car)
for depreciation etc?

I am guessing the answers may be along the lines of "you get your
accountant to do this for you". How much is an accountant likely to
charge? (And how long is that piece of string?) :)

tia

jay
Oh I hope someone replies... I'm after some of the same information.

www.businesslink.gov.uk is a good place if you've not visited.

Pete
 
D

Dave

Oh I hope someone replies... I'm after some of the same information.

www.businesslink.gov.uk is a good place if you've not visited.

Pete
If you do most of the basic book keeping stuff yourselves your
accountant shouldn't charge too much. Computer literate people can
usually manage sales and purchase ledgers without too much brain work.

What you pay him/her will/should be more than compensated for by what
they save you in tax. If not, get a proper accountant!!

As far as household expenses are concerned, make a reasonable judgement.
If the house has 6 main rooms and one is an office then it's 1/6th etc.
Get your phone bills itemised, deduct private calls. Record how many
miles you do in your car on business and allocate costs accordingly.

Make a decision on each item... that can be justified if questioned over
it... and put that into your books. Your accountant should query any
"strange" amounts before the revenue get involved.

Good luck,
Dave
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M

Mike Lewis

I've just started a new business after always being an employee.

Sole trader doing computer and network support.

I have a fair understanding of the (extreme) basics of book keeping
but...

I am starting up from nothing. I have a home computer and a laptop
that I am using for my work, I use the home phone, I use the desk in
the front room, I use the family car etc etc etc. I have some basic
tools. How do I work out how much of (e.g.) the phone bill, electric
bill, etc etc that I can charge to the business?

How do I value things I already have (e.g. the computer and the car)
for depreciation etc?
[/QUOTE][/QUOTE]

Car can be valued using parkers guide. Might be www.parkers.co.uk. Computer
will be a few hundred if it is a decent one. Other things you are a better
judge than an accountant.
If you do most of the basic book keeping stuff yourselves your
accountant shouldn't charge too much. Computer literate people can
usually manage sales and purchase ledgers without too much brain work.

What you pay him/her will/should be more than compensated for by what
they save you in tax. If not, get a proper accountant!!

As far as household expenses are concerned, make a reasonable judgement.
If the house has 6 main rooms and one is an office then it's 1/6th etc.
Get your phone bills itemised, deduct private calls. Record how many
miles you do in your car on business and allocate costs accordingly.
Also deduct the rental as you haven't incurred that because you are in
business. Essentially all you can claim is the business calls.

On the houseold items you can't claim for water unless you have a meter.
Make a decision on each item... that can be justified if questioned over
it... and put that into your books. Your accountant should query any
"strange" amounts before the revenue get involved.
Essentially you can claim any cost you incur because you are in business and
also the amount by which any expense is higher because you are in business.
 
J

Jay

Also deduct the rental as you haven't incurred that because you are in
business. Essentially all you can claim is the business calls.
Ouch. If I got a second line for family use would I be able to claim
the "current number" bill in its entirety for business?

Main reason - I have broadband (for downloading drivers etc) and I
receive more calls than I make....

.....and of course the kids don't use my internet connection at all, no
siree bob lol

jay
 
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D

DL

As, previously a sole trader for some 20years, my accountant has allways
made a 'small' deduction for use of home facilities (£420 in tax yr 2001).
As I understand it if you go to high on this, by using eg a room (office)
being 1/6 of the total rooms available you may enter into the realms of
Capitol Gains if you sell the property - something you want to avoid.
I have allways claimed a proportion of the phone bill, 80% of a £100 monthly
bill. Its never being questioned.
You can use eg MS Money as a rudimentry accounting system.
I present my Accountant with the totals for each Category/Account at the end
of the tax year and he presents this in a way that is exceptable to the IR.
Costs £250, money well spent.The Accountant would also be able to query
something that doesnt look quite 'right'.
I do of course keep all receipts/invoices etc, filed monthly.
The IR has queried my Return twice, in 20yrs, since I have an extensive DB
of my records I was able to answere the queries promptly and backed up by my
DB and Excell records. - Presentation goes a long way!
 

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