First time bookkeeping

[maybelate]

Hi, my oh became self employed on 31.12.12 as a taxi driver, he bought a used vehicle for a taxi and I will be doing his bookkeeping. My question is that because he had a lot of set up costs e.g., car purchase, insurance, meter purchased and fitted etc., how much of these expenses can he take off his profit for this initial period? Because his first self certification is due for the period of 31.12.12 until 05.04.13 if I take all of the set up costs off the profit for this period he will definitely be in a no profit situation, probably even a minus amount. Should I only put part of the set up costs down for this period and then put some for the following tax year? confused

 

Thanks

[blackambermay]

Hi, my oh became self employed on 31.12.12 as a taxi driver, he bought a used vehicle for a taxi and I will be doing his bookkeeping. My question is that because he had a lot of set up costs e.g., car purchase, insurance, meter purchased and fitted etc., how much of these expenses can he take off his profit for this initial period? Because his first self certification is due for the period of 31.12.12 until 05.04.13 if I take all of the set up costs off the profit for this period he will definitely be in a no profit situation, probably even a minus amount. Should I only put part of the set up costs down for this period and then put some for the following tax year? confused

 

 

Most businesses are expected to make a loss in the first year or so, don't worry about it, I included everything in my first assessment and it showed a loss of £1500, but then I went into good profit the following year and every year since.

The problem is if you split the costs over two periods the dates on the receipts won't match the year, and it just isn't worth the hassle of explaining in the event of an audit.

I would just put the expenses on your first year and go from there. You are looking at a 4 month period, I would be highly surprised if you made enough money to compensate your purchases in that time.