self-emplyed,cash - what docs?

[bluebird4]

Hello,
I'm planning to apply for TIER 1, and most of my earnings come from my self-employment, and almost all payments are made by customers (not companies) in cash. When customers pay, I give them a sheet from my receipt-book. A receipt-sheet in such receipt-books looks as follows: it has all the information about me printed in it (it is required by the local law - info like my tax number, address, etc), and when I recieve money from a client, I write the following information about him into the sheet (by hand): the name of the client, his address, the amount of payment made, what services she/he paid for, the date, I put my signature on it and he signs it, too. That's all. Then I can deposit the money if I want to, but I don't have to do it by law. I also show the amount of income recieved in my annual tax declaration. I cannot send original receipts to HO because I may need them for tax inspection procedures and must keep them for a few years.
So the question is, what documents should I present to the HO to confirm my earnings in cash?
Thank you very much in advance.

[beecharmer1800bc]

Hello,
I'm planning to apply for TIER 1, and most of my earnings come from my self-employment, and almost all payments are made by customers (not companies) in cash. When customers pay, I give them a sheet from my receipt-book. A receipt-sheet in such receipt-books looks as follows: it has all the information about me printed in it (it is required by the local law - info like my tax number, address, etc), and when I recieve money from a client, I write the following information about him into the sheet (by hand): the name of the client, his address, the amount of payment made, what services she/he paid for, the date, I put my signature on it and he signs it, too. That's all. Then I can deposit the money if I want to, but I don't have to do it by law. I also show the amount of income recieved in my annual tax declaration. I cannot send original receipts to HO because I may need them for tax inspection procedures and must keep them for a few years.
So the question is, what documents should I present to the HO to confirm my earnings in cash?
Thank you very much in advance.

Get your accountant to prepare docs for you mate. And your annaul tax declaration can also be used in making the application.
Take some time and review the policy and guidance notes for more info.

[bluebird4]

Thanks a lot for your reply.
I have read all other posts touching the same topic, and a new question has arisen: as two documents must be submitted to confirm each source of earnings, can it be in my case the annual declaration (or a letter from my tax inspection based upon my declaration) and a letter from my accountant, or are these things too "weak"? Should I try and send copies of receipts from individual clients (as I must keep the originals for the tax inspection)? And what about bank account - I haven't banked all the money I earned and when I did, I deposited it unsystematically, I mean, not immideately after getting it from my clients and not in the same amount.

[Sushil-ACCA]

Thanks a lot for your reply.
I have read all other posts touching the same topic, and a new question has arisen: as two documents must be submitted to confirm each source of earnings, can it be in my case the annual declaration (or a letter from my tax inspection based upon my declaration) and a letter from my accountant, or are these things too "weak"? Should I try and send copies of receipts from individual clients (as I must keep the originals for the tax inspection)? And what about bank account - I haven't banked all the money I earned and when I did, I deposited it unsystematically, I mean, not immideately after getting it from my clients and not in the same amount.

What is nature of business-if it is retail shop u will be fine

but u r a IT company than u need to provide name, adress and contac details of parties who paid u cash - otherwise yr case will weak

amount deposted more than 2k in cash also raises suspision

[bluebird4]

It's not a retail shop, it's education services (private tuition, but not IT, in groups)

[Idea]

document proof for a business

- Business account transactions...it does not matter if the income is irregular
- The receipts should inculde VAT ...and VAT paid to govt. should tally
- Businedd account statement prepared by a qualified accountant
- Company tax returns
- Personal tax returns (which includes income received from the business)

[Sushil-ACCA]

It's not a retail shop, it's education services (private tuition, but not IT, in groups)

U NEED TO PROVIDE NAMES Adress and contact details of students

and u will be fine

[bluebird4]

Thanks a lot!

Addresses and names of the students should not be a problem, as they are written on the receipts. And I don't pay VAT as I use a patent-based simplified system of taxation, so I don't have to pay this tax.

[Sushil-ACCA]

Thanks a lot!

Addresses and names of the students should not be a problem, as they are written on the receipts. And I don't pay VAT as I use a patent-based simplified system of taxation, so I don't have to pay this tax.

Tax payment is decided byHMRC AND NOT BY u

if this is tax free income than U will not get any points for this earning from HO

ANY WAY u have to pay tax on tuition income

[dima]

Thanks a lot!

Addresses and names of the students should not be a problem, as they are written on the receipts. And I don't pay VAT as I use a patent-based simplified system of taxation, so I don't have to pay this tax.

Tax payment is decided byHMRC AND NOT BY u

if this is tax free income than U will not get any points for this earning from HO

ANY WAY u have to pay tax on tuition income

Need a suggestion from you Sushil.
Iif one is self employed and comes under SEE( i.e the earnings per year is below GBP 5000, do not need to pay classNI2) does he/she needs to pay tax or not? As you say if no tax paid , No points given by the HO.

[Sushil-ACCA]

Thanks a lot!

Addresses and names of the students should not be a problem, as they are written on the receipts. And I don't pay VAT as I use a patent-based simplified system of taxation, so I don't have to pay this tax.

Tax payment is decided byHMRC AND NOT BY u

if this is tax free income than U will not get any points for this earning from HO

ANY WAY u have to pay tax on tuition income

Need a suggestion from you Sushil.
Iif one is self employed and comes under SEE( i.e the earnings per year is below GBP 5000, do not need to pay classNI2) does he/she needs to pay tax



or not? As you say if no tax paid , No points given by the HO.

NI and Tax are separate issue

U have to pay tax otherwise yr earnings will be ignored by HO

AS PER HMRC rules this income is taxable

[dima]

Thanks a lot!

Addresses and names of the students should not be a problem, as they are written on the receipts. And I don't pay VAT as I use a patent-based simplified system of taxation, so I don't have to pay this tax.

Tax payment is decided byHMRC AND NOT BY u

if this is tax free income than U will not get any points for this earning from HO

ANY WAY u have to pay tax on tuition income

Need a suggestion from you Sushil.
Iif one is self employed and comes under SEE( i.e the earnings per year is below GBP 5000, do not need to pay classNI2) does he/she needs to pay tax



or not? As you say if no tax paid , No points given by the HO.

NI and Tax are separate issue

U have to pay tax otherwise yr earnings will be ignored by HO

AS PER HMRC rules this income is taxable

Thats a noticeble info. Thanx.

[bluebird4]

Sushil-ACCA,

but what if I don't pay VAT because I can't do it by law? According to my system of taxation I only must pay income tax and two taxes to the federal pension fund as a self-employed person, that's all.

[Sushil-ACCA]

Sushil-ACCA,

but what if I don't pay VAT because I can't do it by law? According to my system of taxation I only must pay income tax and two taxes to the federal pension fund as a self-employed person, that's all.

Only HMRC Laws works and u need to pay tax on all your earnings -

and only taxed income earned by Applicant is considered by HO- THATS ALL

[bluebird4]

Sushil-ACCA,

I'm very sorry but I'm not getting you. I have to ask again as I don't want to apply if it's clear I haven't got any chances. So, when you say "tax", what do you mean? VAT (value-added tax) or income tax?

[Sushil-ACCA]

Sushil-ACCA,

I'm very sorry but I'm not getting you. I have to ask again as I don't want to apply if it's clear I haven't got any chances. So, when you say "tax", what do you mean? VAT (value-added tax) or income tax?

HO is no way conserned with yr VAT

ONLY iNCOME Tax

[HSK Accountancy Services]

[quote- The receipts should inculde VAT ...and VAT paid to govt. should tally
- [/quote]

VAT is not required if the turnover is below the minmum threshold. So unless he is getting tutution fees of around £70K he does not require to include VAT or register for VAT.

[Sushil-ACCA]

[quote- The receipts should inculde VAT ...and VAT paid to govt. should tally
-

VAT is not required if the turnover is below the minmum threshold. So unless he is getting tutution fees of around £70K he does not require to include VAT or register for VAT. [/quote]

Vat is not concerned BY HO , accounts prepared as per accounting rules and taxable income r only concered by HO

[HSK Accountancy Services]

[quote- The receipts should inculde VAT ...and VAT paid to govt. should tally
-

VAT is not required if the turnover is below the minmum threshold. So unless he is getting tutution fees of around £70K he does not require to include VAT or register for VAT.

Vat is not concerned BY HO , accounts prepared as per accounting rules and taxable income r only concered by HO[/quote]

I know, I did not say anything about HO. I just corrected this wrong advice given by someone about the receipts

"The receipts should inculde VAT ...and VAT paid to govt. should tally"

[Sushil-ACCA]

[quote- The receipts should inculde VAT ...and VAT paid to govt. should tally
-

VAT is not required if the turnover is below the minmum threshold. So unless he is getting tutution fees of around £70K he does not require to include VAT or register for VAT.

Vat is not concerned BY HO , accounts prepared as per accounting rules and taxable income r only concered by HO

I know, I did not say anything about HO. I just corrected this wrong advice given by someone about the receipts

"The receipts should inculde VAT ...and VAT paid to govt. should tally"[/quote]

ACCOUNTING CONVENTION Include all this

[bluebird4]

Thanks a lot to all of you for your advice.

[bluebird4]

One more question please... Is it advisable to ask my permanent accountant (I'm outside of UK) to make all the necessary letters for the HO concerning income, taxes, etc, or is it better to hire someone from UK who specializes in this?

[Sushil-ACCA]

One more question please... Is it advisable to ask my permanent accountant (I'm outside of UK) to make all the necessary letters for the HO concerning income, taxes, etc, or is it better to hire someone from UK who specializes in this?

LICENSE TO practice in UK only is valid

[bluebird4]

Even for those earning outside UK?

[Sushil-ACCA]

Even for those earning outside UK?

THERE IS NO difference which part of world an applicant works

IF he is resident in UK than UK practising accountant can sort it out for HO and HMRC point of view , it will be additional support if other documents are available from oprating location