Can complete a tax return?

KMann85
KMann85 Registered Posts: 1
Hi everybody.

I am looking for some advice/ clarification.
I have a friend who is in a band with her husband and they are looking for an accountant to complete their tax return as their previous accountant has retired.
As I qualified MAAT in February 2017 she has asked me if this is something I could do for them. I would like to do this as I believe it will be a good learning experience of putting my aat knowledge into practise but am nervous as although I learnt Business tax as one of my modules I have not completed a real tax return before.
I understand their previous accountant submitted everything for them online using figures that were provided by my friend on an excel spreadsheet.
How would I find out when their return is due? I believe they are classed as self employed under the band name.
I also understand certain items are claimable, for example cost of heating the room they use in the house for practicing in, etc. Is there a guide I can read up on?

Thanks
Katy

Comments

  • Clintm15
    Clintm15 Well-Known FarehamRegistered Posts: 247 🎆 🐘 🎆
    If they are self-employed, their return is due January 31st.

    For the expenses, anything you can conceivably relate to the business will be allowable. If it's too much of a stretch to justify it, don't risk it.
    AAT
    Level 2 - 2011
    Level 3 - 2012
    Level 4 - 2013

    ACCA
    F4 - Corporate Law - Dec 2015 (passed)
    F5 - Performance Management - Dec 2014 (passed)
    F6 - Taxation - Dec 2013 (passed)
    F7 - Financial Reporting - Jun 2014 (passed)
    F8 - Audit & Assurance - Dec 2015 (passed)
    F9 - Financial Management - Jun 2015 (passed)
    Mickdundee
  • PeterC
    PeterC Registered, Tutor Posts: 236
    I'm inclined to agree with Mickdundee. Don't forget your Ethics (competency and due care)!

    If you had done Personal Tax as well you would probably be more confident (and competent) about this. You would at least have practised doing tax returns and not just the supplementary pages.
  • Clintm15
    Clintm15 Well-Known FarehamRegistered Posts: 247 🎆 🐘 🎆

    Clintm15 said:


    For the expenses, anything you can conceivably relate to the business will be allowable.

    Don't listen to this.
    Do listen to this. Don't let people who think completing simple tax returns is some kind of noble calling sway your self belief.

    Due care is as simple as Googling the answer if you are not sure of an individual expense, which is the kind of reassurance you need.

    Nobody starts off with experience, you have to practice. I have completed hundreds of returns now, but I remember that fear on the first try, good luck. :)

    AAT
    Level 2 - 2011
    Level 3 - 2012
    Level 4 - 2013

    ACCA
    F4 - Corporate Law - Dec 2015 (passed)
    F5 - Performance Management - Dec 2014 (passed)
    F6 - Taxation - Dec 2013 (passed)
    F7 - Financial Reporting - Jun 2014 (passed)
    F8 - Audit & Assurance - Dec 2015 (passed)
    F9 - Financial Management - Jun 2015 (passed)
    Mickdundee
  • Clintm15
    Clintm15 Well-Known FarehamRegistered Posts: 247 🎆 🐘 🎆
    Entertaining isn't a business expense, it's specifically disallowed. An MAAT should and almost certainly would know that already. It's NOT a 'legitimate' business expense.

    As long as an expense is 'wholly and exclusively' for the purpose of trading it will generally be allowable. If in doubt, Google it.

    Unless this band is early 1990's Metallica, she shouldn't worry about the task being too complicated.

    No need to worry about my insurance, I work in practice. My Director has been working tax for 40 years, even he has to Google things at times. Better to pro-actively learn than cower away from the task. :)
    AAT
    Level 2 - 2011
    Level 3 - 2012
    Level 4 - 2013

    ACCA
    F4 - Corporate Law - Dec 2015 (passed)
    F5 - Performance Management - Dec 2014 (passed)
    F6 - Taxation - Dec 2013 (passed)
    F7 - Financial Reporting - Jun 2014 (passed)
    F8 - Audit & Assurance - Dec 2015 (passed)
    F9 - Financial Management - Jun 2015 (passed)
    mergenMickdundee
  • Clintm15
    Clintm15 Well-Known FarehamRegistered Posts: 247 🎆 🐘 🎆

    Again, utter rubbish.

    Business entertaining is certainly an expense incurred by businesses and forms part of the accounts. For tax purposes, it is disallowed. You do know the difference between accounts and tax, don't you?

    Self employed people can include anything they like in the accounts, but for tax purposes you will have to write back disallowable expenses.

    It's very common to do partial write backs of private elements of expenses. This makes the taxable profit figure correct, but the private element will still remain in the expenses of the accounts. It doesn't matter because whether allocated to expenses or drawings the effect on the capital accounts is the same.

    I hope this helps you. :)
    AAT
    Level 2 - 2011
    Level 3 - 2012
    Level 4 - 2013

    ACCA
    F4 - Corporate Law - Dec 2015 (passed)
    F5 - Performance Management - Dec 2014 (passed)
    F6 - Taxation - Dec 2013 (passed)
    F7 - Financial Reporting - Jun 2014 (passed)
    F8 - Audit & Assurance - Dec 2015 (passed)
    F9 - Financial Management - Jun 2015 (passed)
    Mickdundee
  • Clintm15
    Clintm15 Well-Known FarehamRegistered Posts: 247 🎆 🐘 🎆

    So are we now in agreement, that the below sentence is horse sh1t?
    'For the expenses, anything you can conceivably relate to the business will be allowable. '

    HMRC's rule is that expenses be 'wholly and exclusively' for the purpose of trading. My statement was just a simplified version of this official rule.

    If you wanted to be helpful to OP, you could have just added 'Oh and don't forget about entertainment expenses'.

    Then again, you have demonstrated a basic misunderstanding of the difference between accounts expenses and expenses for tax purposes. Maybe you would have said it best, if you said nothing at all. ;)

    AAT
    Level 2 - 2011
    Level 3 - 2012
    Level 4 - 2013

    ACCA
    F4 - Corporate Law - Dec 2015 (passed)
    F5 - Performance Management - Dec 2014 (passed)
    F6 - Taxation - Dec 2013 (passed)
    F7 - Financial Reporting - Jun 2014 (passed)
    F8 - Audit & Assurance - Dec 2015 (passed)
    F9 - Financial Management - Jun 2015 (passed)
    Mickdundee
  • Clintm15
    Clintm15 Well-Known FarehamRegistered Posts: 247 🎆 🐘 🎆

    W+E test isn't HMRC rules. It's legislation.

    http://www.legislation.gov.uk/ukpga/2005/5/section/34

    Thank you for this massively important distinction. Despite not asking for help with a Corporate Law exam, I'm sure OP will thank you.
    AAT
    Level 2 - 2011
    Level 3 - 2012
    Level 4 - 2013

    ACCA
    F4 - Corporate Law - Dec 2015 (passed)
    F5 - Performance Management - Dec 2014 (passed)
    F6 - Taxation - Dec 2013 (passed)
    F7 - Financial Reporting - Jun 2014 (passed)
    F8 - Audit & Assurance - Dec 2015 (passed)
    F9 - Financial Management - Jun 2015 (passed)
    Mickdundee
  • RyanMIP
    RyanMIP LincolnshireRegistered Posts: 50
    Clintm15 said:

    W+E test isn't HMRC rules. It's legislation.

    http://www.legislation.gov.uk/ukpga/2005/5/section/34

    Thank you for this massively important distinction. Despite not asking for help with a Corporate Law exam, I'm sure OP will thank you.
    ITTOIA 2005 is tax law, not corporate law.
    MickdundeeTaxManager
  • Clintm15
    Clintm15 Well-Known FarehamRegistered Posts: 247 🎆 🐘 🎆
    RyanMIP said:

    Clintm15 said:

    W+E test isn't HMRC rules. It's legislation.

    http://www.legislation.gov.uk/ukpga/2005/5/section/34

    Thank you for this massively important distinction. Despite not asking for help with a Corporate Law exam, I'm sure OP will thank you.
    ITTOIA 2005 is tax law, not corporate law.
    Actually, if you want to be pedantic, it's statutory law. Many areas relating to tax can be including under the broad definition of 'corporate law' and vice versa.

    For example, my corporate law studies included many areas related to tax. Such as case laws like Ferguson vs John Dawson 1976 or Horton vs Horton 1961 (numerous others), regulations like Money Laundering that have tax implications and even legislation like the Companies Act 2006 contains rules regarding tax authorities. :)
    AAT
    Level 2 - 2011
    Level 3 - 2012
    Level 4 - 2013

    ACCA
    F4 - Corporate Law - Dec 2015 (passed)
    F5 - Performance Management - Dec 2014 (passed)
    F6 - Taxation - Dec 2013 (passed)
    F7 - Financial Reporting - Jun 2014 (passed)
    F8 - Audit & Assurance - Dec 2015 (passed)
    F9 - Financial Management - Jun 2015 (passed)
  • BeccaLouJ9
    BeccaLouJ9 Experienced Mentor DevonFMAAT Posts: 896 Regular contributor ⭐ 😼 ⭐
    edited October 2017
    Lads, calm down. I think OP has long since gone from this discussion! - scared off, no doubt.

    Do you each want a gold star for contributing to the thread? - agree to disagree?
    Clintm15MarieNoelle
  • AAT_Team
    AAT_Team Administrator Posts: 582 🤖 Admin 🤖
    edited October 2017

    So are we now in agreement, that the below sentence is inaccurate
    'For the expenses, anything you can conceivably relate to the business will be allowable. '

    POST AMENDED. PLEASE FOLLOW THE FORUM RULES OR YOU WILL BE BANNED.
    Mickdundee
  • Clintm15
    Clintm15 Well-Known FarehamRegistered Posts: 247 🎆 🐘 🎆
    Manners maketh man. :3
    AAT
    Level 2 - 2011
    Level 3 - 2012
    Level 4 - 2013

    ACCA
    F4 - Corporate Law - Dec 2015 (passed)
    F5 - Performance Management - Dec 2014 (passed)
    F6 - Taxation - Dec 2013 (passed)
    F7 - Financial Reporting - Jun 2014 (passed)
    F8 - Audit & Assurance - Dec 2015 (passed)
    F9 - Financial Management - Jun 2015 (passed)
  • gwenb
    gwenb MAAT, AAT Licensed Accountant Posts: 42
    Hi Katy,
    What advice you decide to take is entirely up to you. After the heated discussion above, I would say:
    * if you have no experience at all preparing a tax return and little knowledge of allowable expenses, then maybe you should refrain from doing this.
    * are you a Licensed accountant yet?
    * competence, conflict of interest and due care seem to be some principles that you should consider if you will embark on preparing your friends' tax return. If something goes wrong, what will happen to you? them? and your relationship with them?
    * if they are self-employed, the module Personal tax of your studies will come handy.

    Good luck,
    G
    MarieNoelle
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