New Sole Trader - Couple of Questions

[Scott4058]

Hi, I am new to the sole trader package and have just a few of questions:

1. As I receive a pension from my previous employment which is more than my current tax code of 747, I am assuming I will be paying tax from the word go on my sole trading profits. In which case how do I change the allowance to zero on the income tax page and do any other cells on other pages need changing?

2. This one could just be me being simple but when a question needs answering its worth asking... I am claiming mileage and see how it shows a total amount claimed in pounds in both G4 and P4 on the purchase sheet. Is there anywhere to record that I have actually taken this amount in cash from the business, plan is at end of each month take out the amount shown on motor expenses on profit & loss sheet and put aside for using on vehicle. What do other people do as best practice?

3. Another simple question but for peace of mind...as a gardener if I were to buy for example fencing materials for a customer, would they be recorded as sales stock or direct costs? And other items such as equipment, clothing and tools for my business are they classed as other expenses?

Thanks for the help in advance guys, once I get my head around bookkeeping this will be a fantastic piece of software.

[antonycc]

Draft tax calc for a pension above the personal allowance:

In the Basic Sole Trader package's Income Tax tab you can overtype the personal allowance in Cell E6 with a new figure to reflect other income. You'll also want to over type the NI rates in the same sheet if you are above State Pension Age.

There is some information on calculating you tax code here: http://www.direct.gov.uk/en/MoneyTax...odes/DG_078414

Expenses for sole trader

As a sole trader you're taxed personally on profit for the business. The mileage expense will automatically reduce the profit and the tax burden along with it.

Our Self Employed package includes a bank reconciliation feature which would need an entry to show funds moving from the business account to the personal account.

Equipment / Stock

If you buy things to sell them to a customer these would be a stock purchase. If you do this without any mark-up take care as while you don't profit from the sale you'll still be getting closer to the VAT threshold.

Equipment that depreciates over time and is bought for use would be a fixed asset. These are entered in purchases and the Fixed Asset sheet too. You can group similar items (e.g. tools) bought together in a pool to avoid tracking too much as an asset. Smaller things could be consumables (saw blades?)

Not every purchase is an allowable expense. Clothes are particular tricky. Take a look: http://www.hmrc.gov.uk/incometax/relief-self-emp.htm

Thanks,

Antony.