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What to include in short accounts on SATR

What needs to be included in short accounts on a SATR

My client has a turnover of around 40,000 with expenses (purchases, motor expenses, use of home etc) of around 24,000.

Can we produce short accounts on his SATR and if so what is the minimum information that should be included? Do we need HMRC permission to do short accounts or is it avalable to all tax payers below the VAT thresh-hold?

Do people feel less information on a SATR is generally better than providing details of all the different expense categories in terms of increasing or decreasing the likelihood of queries from HMRC.

There are a couple of largish expense items which in my view are okay and I would be comfortable trying to argue with HMRC that they were reasonable (if challenged) but just wondered if one was less likely to arouse HMRC interest by providing less rather than more information on the SATR.

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By DJKL
20th Jan 2018 19:31

I suspect it depends on what HMRC expects re the nature of the particular business plus past submissions for the client.

I have no idea what HMRC uses these days but in the past their software tried to detect unusual patterns in the submitted figures, so the sorts of parameters I would expect they would use would be comparing with prior years coupled with the nature of the business and expectations re same.

For instance an accountancy practice with no payroll scheme with £40k fees and £24k costs would look a little strange to me however an online retailer with these sorts of results might not.

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to DJKL
21st Jan 2018 12:07

DJKL wrote:

For instance an accountancy practice with no payroll scheme with £40k fees and £24k costs would look a little strange to me ...

Oh, I don't know. Subs to professional bodies, PI insurance, CPD, printer ink - you can soon get up to £24k.

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By DJKL
to lionofludesch
21st Jan 2018 13:09

For a £40k t/o firm?

My costs last year were £3,500, including £450 bad debt provision movement and £390 depreciation charge. Appreciate I did not have £40k of fees but really can't see why my costs would increase that much if I did.

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to DJKL
22nd Jan 2018 09:39

It's amazing how much ink you use in a paperless office.

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By DJKL
to lionofludesch
22nd Jan 2018 17:22

Go for a B&W laser printer, my Brother knocks out a fair few sheets per cartridge and they are not that expensive each, I tend to only use 2-3 a year.

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20th Jan 2018 20:56

Personally, I hardly ever use the short accounts option for the SA return. We train our clients to analyse properly, and do it ourselves for book-keeping jobs, so the information is easily to hand. I can just about understand the less-detail version for clients who've not analysed. If I've got the info, then I see no reason not to put the analysis on the SA return. Likewise, I use the blank space for full explanations. I just like trying to head-off potential enquiries to save everyone time and effort. I've been doing it this way for many years and have very few enquiries (several years since the last one), but I don't know how that compares to others who do take advantage of minimal declarations.

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20th Jan 2018 22:40

There is no requirement to submit accounts for a self-employed business. If you do, HMRC will ignore them.

Since the turnover is below £83,000 you only need to fill in two boxes: turnover and total expenses.

Some posters have suggested that HMRC are more likely to look into returns with no breakdown. If so, I suspect this depends on the type of business and how suspiciously close the turnover is to the VAT threshold.

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21st Jan 2018 09:42

In my experience it will make no difference at all which option is used.

You do not need HMRC permission.

Re white space disclosure this was all the rage when SA was brought in, in 1996/1997, with some advisers making copious disclosure. Again, in my experience, it makes no difference at all.

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21st Jan 2018 09:45

I agree with Wanderer. I hardly use the white space at all for disclosure. I usually just let my tax software decide on short/long. I've had one full enquiry in the last 10 years, I think, out of c.150 TRs/year.

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21st Jan 2018 12:05

I use the short return option most of the time. No point in giving HMRC bullets to fire. The two or three full enquiries I've had since 1997 have been on full returns - I've never had one on a short return.

You need to enter turnover, allowable expenses a profit before capital allowances, capital allowances and taxable profits.

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By mbee1
21st Jan 2018 13:36

I'm a big believer in giving HMRC what they ask for but no more or no less. Always the short Return where i'm able to and very rarely use the white space.

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By GW
22nd Jan 2018 10:24

As HMRC design the forms and are capable of asking for as much detail as they like, either on the tax return or later, while we have the detail on file there seems little point in giving HMRC more than they are asking for unless the results look very odd. If HMRC are happy with just having the turnover and total expenses and no balance sheet, why give them more?

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By Briar
22nd Jan 2018 15:27

... and it's quicker to enter just 3 numbers (turnover, expenses and capital allowances) .. especially in late January!

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By DJKL
to Briar
22nd Jan 2018 17:28

Not if you have prepared the accounts and the tax return using software that imports, click import, click accounts done, all figures in.

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