# How does your accountant assess your stock?



## 3dom (Oct 30, 2012)

For those that are self-employed, do you know how your accountant assesses your valeting and detailing products (not the equipment) from a taxation point of view? I mean the stock that we use and consume as opposed to those that you may stock for resale purposes. Do they have an allowance for this that's generally accepted by the inland revenue?

Having completed my first year's trading and with the books well and truly 'in', I have a feeling (maybe too late) that the accountant may not have any other valeters on his books......

Anyway, sensible feedback and thoughts welcomed  (I'm up about 20% on profit against my projections, which is nice)


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## Detail My Ride (Apr 19, 2006)

No offence intended, but if you are asking that question i'd be looking for a new accountant! 

Anything that you use to conduct your business (that you cannot conduct your business without) is tax deductible e.g. if you charge a client £100, and £20 of that is your shampoo, wax etc then you will only pay corporation tax on the profit which is £80. This is without VAT which gets a little more complicated but its a similar principle (if you're VAT registered if not doesn't apply).


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## petemattw (Nov 3, 2008)

it should be rolled up into your costs at the end of your period, how much have you purchased in the course of running the business for a year. No one would try to break this down to an indivual customer basis, as it's not relevant to the tax man and too variable, so if you've spent £2k on shampoo waxe qd etc you should get tax back on that figure


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## 3dom (Oct 30, 2012)

Maybe I've given the wrong impression  I haven't spoken to the accountant yet to discuss how he'll process this. It was more curiosity on my part.

Both posts above make total sense; thank you :thumb:


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## Tricky Red (Mar 3, 2007)

Your stock is a cost of sale and will be calculated as part of your purchases. 

At your year end, you should do a stocktake, the value of which will become part of your assets. This will contribute to the value of your assets for your balance sheet and therefore your profit at year end.

Are you registered for VAT?


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## fatdazza (Dec 29, 2010)

Stock used in the year is part of your "cost of sales":

[Stock at start of year] plus [stock bought in the year] minus [stock at end of year]

is deducted from your revenue (income) to calculate your profit for the year. You are then taxed on your profit.

This is basic accouning and your accountant should be aware of this. If not I would be wary of them.....


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## Tricky Red (Mar 3, 2007)

fatdazza said:


> Stock used in the year is part of your "cost of sales":
> 
> [Stock at start of year] plus [stock bought in the year] minus [stock at end of year]
> 
> ...


Yes, would give you a gross profit, less overheads etc etc


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## 3dom (Oct 30, 2012)

Tricky Red said:


> Are you registered for VAT?


Nope


fatdazza said:


> This is basic accounting and your accountant should be aware of this. If not I would be wary of them.....


I am sure that they are more than aware. It was me that was ignorant


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