Ade Ogun, Business Adviser BSc(Econ), ACCA, Business Link, PWC 20 years Small business owner

Ade Ogun, Business Adviser BSc(Econ), ACCA, Business Link, PWC 20 years Small business owner Introduce your self to class What do you hope to get from attendance INTRO MMWW WORKSHOP

Ltd Co. t/o >£6.5m, b/s >£3.26m, em’ee>50 Shareholders of Ltd demand so & >10% Ltd by Guarantee demand by >10% shares Charity where Inc> £0.5m in all cases plus If £0.25m<Inc <£0.5m & assets<£3.26m N.B for Charity number of em’ee irrelevant AUDIT REQUIRED

Option for charities with gross inc >£25,000 but <£250,000, for FY after 4/09 per Charity Commission Mandatory for Charities Inc>£500,000 in all cases plus some cases if £250,000<Inc<£500,000 & Assets>£3.26m INDEPENDENT EXAMINATION

I.E. confirms no evidence that ‘certain things have not been done’ Compared to ‘true and fair view’ of audit Records reviewed & compared to a/cs No substantive tests I.E. Reports concerns to Charity Regulator INDEPENDENT EXAMINATION

Applicable to Self Emp, Co. Dir, trustee, foreign income & complex tax affairs Burden on Self Emp. Notify HMRC Paper returns due by 31st October Online returns by 31st January- calculations done 4u & repayments quicker Once return issued, it must be returned. SELF ASSESSMENT

Self Employed must register <3months Payments made 31st Jan-1stInstal.& Err. Correction based on actual a/cs for last year Payment made 31st Jul-2ndInstal. Calculation Class 4 National Ins. & Payt 31st Jan based on tax adjusted self employed profits SELF ASSESSMENT

Assess Taxable Income: Self employment, Partnership Profits, Rental & Investment Income Assess Capital Gains on sale of Assets: Homes, shares and chargeable assets>£38,000 where first £9,600 of gains exempt. Claim tax allowances and reliefs to reduce taxable income e.g. Personal allowance £6,035 SELF ASSESSMENT

Start with Profits from accounts: Adjust for expenses disallowed by HMRC Claim allowances permitted by HMRC Adjusted Profits subject to tax Calculate tax liability Adjust liability for tax already deducted at source Calculate National Insurance (Class 4) liability SELF ASSESSMENT

Mr and Mrs Padmore run a clothing store in Bethnal Green, London. The business is unincorporated and has been a going concern. The financial year end is the 30th November 2008 Accounting Profit £60,250 but can you suggest adjustments required by HMRC? Case study

HINTS: Expenses should only be deductable against profit if wholly and exclusively necessarily incurred in course of business. Wages paid to family members should be at fair market value. Claimable and non- claimable expenses

Profit from Accounts 60,250 Depreciation F & F + 2,000 Depreciation Vehicles + 1,500 Daughter’s deemed drawings + 4,500 Case study

Rent and Rates third add back + 7,333 Light and Heat + 3,017 Personal Holiday + 2,150 Car personal use is two thirds + 2,800 Disallowable sundry expenses? Case study

Add back Political Donations + 200 Add back Golf Digest + 150 Allow H & S fine: As in ordinary course of business Case study

Profit from accounts 60,250 Add back Depreciation + 3,500 Daughter’s drawings + 4,500 Rent, rates, light & heat + 10,350 Disallowable expenses + 5,300 Profit s.t. Allowanes and reliefs 83,900 Case study

Start with Profits from accounts: 60,250 Adjust for expenses disallowed + 23,650 Capital (4,080) & P.A. (6035) - 10,115 Profit B4 Savings Inc subject to tax 73,785 Calculate tax liability 23,274 Adjust for tax deducted at source - 360 Calculate NI liability 3,532 SELF ASSESSMENT

Thank you for your time. Case study

Ade Ogun, Business Adviser BSc(Econ), ACCA, Business Link, PWC 20 years Small business owner