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Ade Ogun, Business AdviserBSc(Econ), ACCA, Business Link, PWC20
years Small business owner Introduce your self to class What do you
hope to get from attendance
- Ltd Co. t/o >6.5m, b/s >3.26m, emee>50Shareholders of
Ltd demand so & >10%Ltd by Guarantee demand by >10%
sharesCharity where Inc> 0.5m in all cases plus If 0.25m
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Option for charities with gross inc >25,000 but 500,000 in
all cases plus some cases if 250,000
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I.E. confirms no evidence that certain things have not been done
Compared to true and fair view of audit Records reviewed &
compared to a/cs No substantive tests I.E. Reports concerns to
Charity Regulator
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Applicable to Self Emp, Co. Dir, trustee, foreign income &
complex tax affairsBurden on Self Emp. Notify HMRCPaper returns due
by 31st October Online returns by 31st January- calculations done
4u & repayments quicker Once return issued, it must be
returned.
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Self Employed must register
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Assess Taxable Income: Self employment, Partnership Profits,
Rental & Investment Income Assess Capital Gains on sale of
Assets: Homes, shares and chargeable assets>38,000 where first
9,600 of gains exempt. Claim tax allowances and reliefs to reduce
taxable income e.g. Personal allowance 6,035
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Start with Profits from accounts:Adjust for expenses disallowed
by HMRC Claim allowances permitted by HMRC Adjusted Profits subject
to tax Calculate tax liabilityAdjust liability for tax already
deducted at sourceCalculate National Insurance (Class 4)
liability
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Mr and Mrs Padmore run a clothing store in Bethnal Green,
London. The business is unincorporated and has been a going
concern. The financial year end is the 30th November 2008
Accounting Profit 60,250 but can you suggest adjustments required
by HMRC?
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HINTS:Expenses should only be deductable against profit if
wholly and exclusively necessarily incurred in course of business.
Wages paid to family members should be at fair market value.
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Profit from Accounts60,250Depreciation F & F+
2,000Depreciation Vehicles+ 1,500 Daughters deemed drawings+
4,500
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Rent and Rates third add back+7,333 Light and Heat+3,017
Personal Holiday+2,150 Car personal use is two thirds+2,800
Disallowable sundry expenses?
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Add back Political Donations+ 200Add back Golf Digest+150 Allow
H & S fine:As in ordinary course of business
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Profit from accounts60,250Add back Depreciation+ 3,500Daughters
drawings+ 4,500 Rent, rates, light & heat+ 10,350Disallowable
expenses+ 5,300Profit s.t. Allowanes and reliefs83,900
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Start with Profits from accounts:60,250Adjust for expenses
disallowed + 23,650 Capital (4,080) & P.A. (6035)-10,115 Profit
B4 Savings Inc subject to tax73,785 Calculate tax
liability23,274Adjust for tax deducted at source- 360Calculate NI
liability 3,532
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Thank you for your time.