Tax & Accounting

Tax regulations stipulate that people who are self-employed must register with HM Revenue and Customs (HMRC) by 5th October following the tax year that they started – in other words if you start between now and 5th April 2017 (end of the tax year), register with HMRC by 5th October 2017.

Registering as a new business with HMRC is quite straightforward. The easiest way is to go to their website (https://www.gov.uk/new-business-register-for-tax) and complete the required information. There will be a number of questions for you to complete to get registered with HMRC. There are a lot of useful guides on their website to help you with this process.

After this you will be required to complete an annual tax return where you will have to declare your income from WeFiFo less the expenses you incurred (as well as any other taxable income). If completing a paper tax return this needs to be submitted to HMRC by 31st October following the end of the tax year. HMRC are encouraging online tax returns and if you choose this option then the deadline is 31st January, 3 months later, following the end of the tax year.

There is no prescribed form for keeping records and preparing accounts as long as they record all income and expen diture for the business. You need these so that you can work out your profit or loss for the year. It is very important to keep all the bills and receipts for each and every expense claimed just in case you may have to show them or justify them to HMRC.

Being self-employed and working from home will result in you incurring costs that you can claim against the money you make hosting an event. Examples of costs you may likely incur and can claim as allowable expenses are:

• Food ingredients & other raw materials
• Travel costs, e.g. fuel, parking, train or bus fares
• Clothing expenses, e.g. uniforms
• Staff costs, e.g. salaries or subcontractor costs
• Financial costs, e.g. insurance or bank charges
• Advertising or marketing, e.g. website costs
• Accountancy fees

To put it another way, there are many allowable costs to claim against business income. In your first year or so as you are building your customer base these expenses can often exceed your income. Where your costs exceed your income you will make a loss. This loss can be used against future profits of your business and this is another good reason why it is important to keep records and complete an annual tax return. You don’t want to pay tax too soon when you are growing your business.

This guide has been produced with the typical budding cook we have in mind - starting out as self-employed for the first time in a new venture. It is not possible to produce a comprehensive guide for all cooks and businesses. However we hope this gives some “flavour” (pardon the pun!) of what you need to do to get started.