Taylor, it doesn't matter what you do with your earnings once you've got them provided you keep proper records of your takings - it's certainly not obligatory to bank it and you can spend whatever you like. Your accountant is just trying to make sure you account for it all - you need to keep receipts, bills, train tickets and everything else when it comes to things you intend to claim tax relief on, so that in the event you are asked to prove any of it you can easily do so. Bank statements are important because they are a record of your finances - it doesn't matter what gets spent and what doesn't and your accountant will need them.

Writing down things like expenses per individual job and resultant profit is a really helpful way for you to keep track of how you're doing, but it's not important for a tax return - you need the total amount which has come in, the total amount that has gone out and proof of where it's gone and the figure when you've subtracted the second from the first is your profit for the year - this is (broadly) how your tax liability is calculated.

You can do it yourself, but proper accounts can not only be helpful if you want to borrow money (to buy property say - it helps you look credible) but an accountant will be able to help with expenses and allowances you might not know about yourself, especially if you do incalls and have housing/accommodation costs. You can ask him about things like this on Friday too - I do think that deciding not to go ahead because organising your records properly seems like a bit of a task could be shooting yourself in the foot a bit?

You could actually be saving yourself more than your accountant is costing you so perhaps  best to stick with him/her.

Plus, if you have troubles getting organised and feel overwhelmed, you should be able to get away with basically flinging all the paperwork you've got at this accountant - it's their job to know exactly what to do with it, if you're paying them to do your tax returns for you. I apologise if that really pees accountants off but that's pretty much what I did when I hired mine! I was completely confused and terrified because I had no idea how much I would have to pay or when or what or why. I still reply to most of his emails with "Eh?" but luckily the bits where the Inland Revenue send you a bill are pretty straightforward so I know how to deal with those!

If things like your bills *always* come out of your bank account as direct debits, I think you might not have to worry if you're missing one or two here and there because the accountant can look at your statements and see that it says "British Gas ?42" or whatever on the same day it always comes out. So that's pretty straightforward. As Amy said, it's stuff you want to claim as expenses that you need to make sure you've kept the records of.

My accountant saves me loads of money and even more time so I don't resent the money I spend on that (it's tax deductible anyway, like Cat says!) - he works out what I get back having a "home office" etc which is rather vital. And frankly, if I could live my whole life without even looking at a self-assessment form, I'd be pretty happy even though I hear it's quite possible to do it all yourself. Tedious forms just fill me with dread.

I am pretty organised, I spent my Sunday afternoon getting everything together, my only concern is i have two bank accounts one for my direct debits and the other for work/hotels etc!

Thanks for the advice ladies! x

A couple of questions. Can I use hotel fees, apartment fees and the rent at my home as expenses even when I am not supposed to use the properties for what I do?

Yes - HMRC are concerned with the figures and that's all; anything else is a separate issue for the people who own/rent you your premises.

Can I claim petrol costs if I drive to Scotland to work, even if it so happened I was going there anyway for other things too.

Yes, although technically a percentage should be knocked off as it would be for personal use (which isn't tax deductible).

What if I have to take 6 months off? Can I claim benefits again?

As far as I know (I've never claimed so I'm not sure) anybody who isn't working or is on a low income can claim benefits. The actual amount of money you receive may be reduced if you have enough savings to support yourself whilst you're not working, and rightly so.

What is the limit to declare before ending up having to register for the horrid VAT?

Last time I looked it was ?73000. You'd have to be going at a fair old pace, although I daresay a fair few pimps and parlours would qualify.

If I wanted to buy a 200 grand house in 3 years how much should I be showing as earning and how much deposit should I have? Want to put down as much as possible. Have been advised you need 3 years worth of tax returns to get mortgage.

So far I haven't really been working many hours but that has to change if I want my house.

I can't answer this Lottie - the deposit should be as much as you can save up (I had a 30% deposit for my place) and the rest is down to whatever mortgage provider you can find who will deal with you. It's not easy when you're self employed, especially at the moment - I gave up in the end and got a bank loan for the rest, but then I had proper accounts, another house and a 20 year spotless banking history to rest on.

If you don't have an accountant, I would have a chat with your bank about planning, plus you can usually get a free meeting with an independent financial advisor who can help you if you really want to get properly organised . Mine sorted out my pension, savings and investment plan, the lot - they take a commission but it's well worth it IMO.

Quote from: ladyofthemansion on 23 November 2011, 10:29:52 am

A couple of questions. Can I use hotel fees, apartment fees and the rent at my home as expenses even when I am not supposed to use the properties for what I do?

Yes - HMRC are concerned with the figures and that's all; anything else is a separate issue for the people who own/rent you your premises.

Quote from: ladyofthemansion on 23 November 2011, 10:29:52 am

Can I claim petrol costs if I drive to Scotland to work, even if it so happened I was going there anyway for other things too.

Yes, although technically a percentage should be knocked off as it would be for personal use (which isn't tax deductible).

Quote from: ladyofthemansion on 23 November 2011, 10:29:52 am

What if I have to take 6 months off? Can I claim benefits again?

As far as I know (I've never claimed so I'm not sure) anybody who isn't working or is on a low income can claim benefits. The actual amount of money you receive may be reduced if you have enough savings to support yourself whilst you're not working, and rightly so.

Quote from: ladyofthemansion on 23 November 2011, 10:29:52 am

What is the limit to declare before ending up having to register for the horrid VAT?

Last time I looked it was ?73000. You'd have to be going at a fair old pace, although I daresay a fair few pimps and parlours would qualify.

Quote from: ladyofthemansion on 23 November 2011, 10:29:52 am

If I wanted to buy a 200 grand house in 3 years how much should I be showing as earning and how much deposit should I have? Want to put down as much as possible. Have been advised you need 3 years worth of tax returns to get mortgage.

So far I haven't really been working many hours but that has to change if I want my house.

I can't answer this Lottie - the deposit should be as much as you can save up (I had a 30% deposit for my place) and the rest is down to whatever mortgage provider you can find who will deal with you. It's not easy when you're self employed, especially at the moment - I gave up in the end and got a bank loan for the rest, but then I had proper accounts, another house and a 20 year spotless banking history to rest on.

If you don't have an accountant, I would have a chat with your bank about planning, plus you can usually get a free meeting with an independent financial advisor who can help you if you really want to get properly organised . Mine sorted out my pension, savings and investment plan, the lot - they take a commission but it's well worth it IMO.

Thank you. What you have said is very helpful.

Met with an accountant today, was a ten minute appointment, he is pleased with my books, meeting with him in a weeks time. thanks for every ones advise, its a massive stress of my shoulders now! i feel more official now hehehe!