Hello all,
I think I might have made a boob, if yes then i want to rectify.
I have been a professional chef since 2014. Since my initial internship, i became a type of freelance chef for various health clubs. Becuase of this job i was self employed ofcourse. So how i worked was I gave invoices at the end of the week or month to to clubs i worked for, and then do SA at the end of year.
But, I start my own takeway shop in June last year. [edit: take away business is LTD co.]
I never taken any money out of the business because after all monthly bills and rent there was not much left. But after it built up and so in May 2019 i took out £13,500 as salary. But i did this by issuing a invoice to my takeway business.
I thought this was a easy way of doing it, but speaking with my brothers in law he says its not right and i could get fined as it looks like im not paying the proper tax. This is never my intention
I don't want to do this wrong. If its wrong i want to rectify. I have never done anything wrong financially in my life.
Can anyone help?
Thank you
Replies (41)
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No, you shouldn't be invoicing yourself. I assume you're operating as an unincorporated sole trader drawing up accounts to 5 April each year?
Have you submitted your 2019/20 tax return yet? If so, just amend it. If not, then there's no issue.
And follow the advice above re getting an accountant :-)
Yes, you're fine. The amounts you withdraw for yourself (called drawings - you don't need to prepare an invoice for these amounts, but should keep records of what you've taken) should be excluded from your calculation of taxable profits.
But as others have said, do get an accountant who can make sure that the calculation of your taxable profit is correct.
Hello all,
I think I might have made a boob, if yes then i want to rectify.
I have been a professional chef since 2014. Since my initial internship, i became a type of freelance chef for various health clubs. Becuase of this job i was self employed ofcourse. So how i worked was I gave invoices at the end of the week or month to to clubs i worked for, and then do SA at the end of year.
But, I start my own takeway shop in June last year.
I never taken any money out of the business because after all monthly bills and rent there was not much left. But after it built up and so in May 2019 i took out £13,500 as salary. But i did this by issuing a invoice to my takeway business.I thought this was a easy way of doing it, but speaking with my brothers in law he says its not right and i could get fined as it looks like im not paying the proper tax. This is never my intention
I don't want to do this wrong. If its wrong i want to rectify. I have never done anything wrong financially in my life.
Can anyone help?Thank you
Your dates don't add up, I presume you mean in May 2020.
You are in a mess aren't you. Always get an Accountant involved BEFORE you do anything. Tax planning, The key is in the word. Mise en place. Now all you can expect is damage limitation. get an Accountant immediately, don't waste more time researching how to DIY, as Accountants takes years to train! Longer than chefs.
Are you VAT registered? Should you be?
Do you have staff? Run a payroll?
Cash business. Hope you have good records.
1) you started a take away shop last June but you invoiced it in May 19? Doesn't make sense.
2) you can't invoice for wages
3) your self employed, the money you receive IS your wages.
4) your take away business is a Ltd company? You need an accountant
5) pay for an accountant.
It is FRIDAY everybody!
Not me with this though
EDIT
If it was genuine then the #BEKIND is working
Well, irrespective of whether it's May 19 or May 20, Limited Co or Sole Trader, the good news for the OP is that it can all be sorted fairly easily.
But get an accountant to do it.
You can't afford to not get an accountant, you could end up with way more than you can afford in tax bills and penalties if you don't get everything sorted out ASAP.
Fortunately it's not too late to avoid the real problems that may have accrued, though you would have been better off seeking professional advice as soon as you decided to open your shop, before setting up the company.
If Sift wants to reach out to (help) the public, it should abandon its "have an interest in tax or accounting issues? Post your query on Any Answers" message and replace it with what you say here. "An accountant could save you money. Seek professional advice at the outset."
OP, you'll be worse off than you would have been had you hired an accountant earlier; but if you don't hire one now, your costs will only escalate.
OP, you could try UKBF (UK Business Forum) which is a sister-site of Accountingweb. There you'll find plenty of accountants positively jostling with each other for your business. Plenty of free advice on offer too.
Hi Aitskunk,
I hope you have got the message in a polite and constructive way that when it comes to tax affairs, your first port of call should be a professional adviser. If you're hoping to rely on advice from an internet forum, you're unlikely to get a swift, unambiguous answer to your questions - or practical help at actually implementing it and dealing with HMRC.
I'd like to thank all the accountants who have taken the time to point this out to you and to offer a bit of reassurance that your difficulties can be resolved without too much anguish.
To answer the points raised above by Tax Dragon and I'm Sorry... AccountingWEB was not designed as a platform for free accountancy advice and we do not advertise that in any way. That said, we don't think it's appropriate to chase anyone who comes in here with an accountancy-related question away with digital pitchforks and burning torches. Our sister site UKBF is more suitable for some of these queries, but getting a broad view of tax and accounting challenges in real life doesn't hurt any of the people on this forum either. And if you don't think it's worth bothering with, then let others do it.
I'm Sorry's is also missing an important point about these exchanges. If you see someone who might need accountancy services, there is nothing to stop you letting them know that this is the sort of work you regularly do as long as it's relevant to their query. The private messaging tool can be used for this purpose too.
The moderators will draw the line, however, if the self-promotion becomes blatant and unrelated to the specific discussions.
I'm Sorry's is also missing an important point about these exchanges. If you see someone who might need accountancy services, there is nothing to stop you letting them know that this is the sort of work you regularly do as long as it's relevant to their query. The private messaging tool can be used for this purpose too.
The moderators will draw the line, however, if the self-promotion becomes blatant and unrelated to the specific discussions.
Gosh, JS, I honestly didn't know holding yourself out to the public was allowed on Aweb. If I understand correctly, you're saying:
If you see anyone in need of an accountant it's acceptable to put your best foot forward and offer your own services;
Such self-promotion is not confined to the thread, but can also be carried out by private message;
Such self-promotion must be subtle rather than blatant.
Such self-promotion must be subtle rather than blatant.
I have a form of words for you, I'msorry:
An accountant could save you money. Ideally, you should have sought professional advice at the outset. You'll now be worse off than you would have been had you hired an accountant earlier; but if you don't hire one now, your costs will only escalate.
(You might need to add a PS that you are an accountant. Once upon a time, that would have been obvious - you were on Aweb after all. These days, the PS is probably needed.)
(You might need to add a PS that you are an accountant. Once upon a time, that would have been obvious - you were on Aweb after all. These days, the PS is probably needed.)
Thank you TD, I must remember to mention that in my PM to the OP :)
An accountant could save you money. Ideally, you should have sought professional advice at the outset. You'll now be worse off than you would have been had you hired an accountant earlier; but if you don't hire one now, your costs will only escalate.
Unashamedly blatant and completely lacking in subtlety, Tax Dragon.
You need a less obvious approach:
This will probably, although not necessarily definitely, be your very last but one chance to invest in hiring a suitable accountant such as myself; on the understanding that the more you spend the more you might possibly save.
Tax Dragon wrote:
An accountant could save you money. Ideally, you should have sought professional advice at the outset. You'll now be worse off than you would have been had you hired an accountant earlier; but if you don't hire one now, your costs will only escalate.
Unashamedly blatant and completely lacking in subtlety, Tax Dragon.
You need a less obvious approach:
This will probably, although not necessarily definitely, be your very last but one chance to invest in hiring a suitable accountant such as myself; on the understanding that the more you spend the more you might possibly save.
Nice touch on the fees. But it commits you: you are fessing up to being an accountant at the start.
My way, if you want the business, you can add the PS; if you don't, don't.
I'm sure if we worked together we could come up with something good.
I'm sure if we worked together we could come up with something good.
A standard (non-blatant) strap-line with which to tout for business on A-web? Just lIke they do on UKBF: Your Cheapest Accountant; Your cheapest Online Accountant; We're so Cheap we Pay You Accountants. What a cunning plan!
On a serious note, the accountants who dispense free advice on that [UKBF] site each have disclaimers; which I suppose is needed on Aweb if advising Joe Public directly is to be encouraged.
On a serious note, the accountants who dispense free advice on that [UKBF] site each have disclaimers; which I suppose is needed on Aweb if advising Joe Public directly is to be encouraged.
And on that same serious note, one might presume that the reason the Aweb forum doesn't do that is that it was designed for accountants. Even if that has evolved (per John) to be a forum for discussing tax and accounting (and related) issues for all and sundry with any interest in those topics, it is not an appropriate place to come for advice on a personal situation.
To point that out is not to wield a digital pitchfork - though I don't disagree with John's comments about the aggression that does get exhibited in here.
Happily, I see no such on this particular thread. I guess the question isn't 'seen' as too bad (though the question, which translates fairly readily to "have I left it too late to hire an accountant?" betrays some screwed-up thinking).
Aaaannyway... we're back in Aweb's navel. I'm off - till next time, ciao.
(..the question, which translates fairly readily to "have I left it too late to hire an accountant?" betrays some screwed-up thinking).
Well if he has left it too late that would be his second mistake. In which event his post title would translate even more readily into I Think I've Made a Pair of [***].
Apologies, I made a coffee half way through my post and have accidentally recorded your original! (I feel like I have treated you like an anonymous OP... maybe now you can see it from the other side?... what's it like?... is it (am I) as bad as they say?)
No need to apologise TD, and please don't trouble yourself to perform an edit as that would only lead to pink triplicate copy.
I had a tea-related snorting incident when I saw the "pair of..." comment.
I was wondering why this thread was trending so high on and guessed that the ever so slightly salacious headline was attracting some interest, but had managed to evade the pink meanies of our automated spam filter.
Though I sense some satirical intent in the latter part of the discussion, you've essentially go my point.
Come to think of it, if you all started posting comments about how available you were to advise on a paid basis, I bet the hit-and-run advice seekers would disappear very quickly.
1 Responders did not join looking to sell services
2 OP gave up when no more fish to hook
3 Abandoned threads do sometimes lead a life of their own, where is the harm in that?
So abandoned thread was correct.
And any subsequent 'helpers' were wasting their time.
I thought Trolls hung around bridging software
Well now we know the real reason why the OP appeared to give up was because he got engaged, and to one of our very own no less. Which might go some way to explaining why threads often appear to be abandoned by their OPs early-doors.
Well done JS for explaining the Aweb self-promotion guidelines; and thank you OP for coming back to tell us your outcome. I do hope matters are soon resolved for you.
I will hazard a guess it was by someone who never posts to help others out.
Cynic- moi?!
Does make a nice change though to have a FL business owner not aggressively throwing his toys out of the pram at the earliest opp.
Heavens, you mean JS? Surely not!
Rattles and prams? I guess we'd most of us here send the suicide rate soaring if we worked for the Citizens' Advice Bureau.
Note to self: must improve on people skills.