can somebody please tell me what expenses have i got to take out of my gross profit?

Question

from the profit what expendicture have i got to account for, do i have to take my wages or pay rent or bills from this or is that separate

Answer 1

You take all your expenses that are related to your business out of you gross profit, plus your wages.

If you have problems in sorting your accounts out and you don't know what to do, go to your local Inland Revenue Office, and ask to speak to someone who will actually sit and show you what you can and can't do, and what percentages you can put down if you are working from home, and use of a private vehicle etc for business purposes.

Alternatively, if you look in Yellow Pages you will most certainly be able to find an accountant or Book-keeper who for a fee will advise you, and in the case of a book-keeper, do it all for you.

If you lived in Devon I would do it for you.

Answer 2

Most expenses you have incurred in order to generate the income will lower your gross profit (travel, advertising, etc). What remains will be your net income and this will be what is taxable.

Regarding your wages and other expenses for which *YOU* are the beneficiary (rent or other personal bills), this may or may not be deductible by your business. How is your business structured? Sole proprietor, corporation, partnership?

For certain business structures, you can deduct your wages in order to arrive at the *business* taxable income, only to have it considered as income on your *personal* tax filing. It is best to see a good tax accountant to guide you thru this.

Answer 3

You'd be wise to talk to a CPA and get guidance on what records you need to keep, and what expenses you can deduct.