Hi @kevin_alpha_suds
I know that QB is advertised as an accountant-replacement but, in all honesty, it isn't and, unless you understand the ins-and-outs of VAT & tax, the best few hundred quid you'll spend is getting an accountant to run things past & check things every quarter (VAT) & every year (SA/Tax).
Everyone has to start somewhere though & your question(s) are more complicated than you might realise.
@kevin_alpha_suds wrote:
Could you help me understand what expenses I can claim back the whole amount for, and what I can claim only VAT back on, and how to enter these in QB using the correct dropdown choices?
You can't 'claim back' the whole of anything. I think what you mean is 'offset against income' for SA/Tax purposes.
Essentially, any expense incurred in the day-to-day running of the business can be offset against your income - so that, at the end of the tax year, you pay income tax on profits. There are exceptions to this (hence advice to run things past an accountant) - such as buying an asset like your van. Assets are treated differently - because you would have something to sell after the end of the tax year, you can't claim all of it against this year's income - you can only claim a percentage of the value, the amount the asset is deemed to have depreciated.
Claiming back VAT (the 20% or 5%) on invoices received. If you have received an invoice for an expense that shows VAT on it, then you can reclaim it. Always ask for a VAT receipt. Enter into QB using S20% or R5% VAT Code & it will keep track & reclaim each quarter.
@kevin_alpha_suds wrote:
I have used my own savings to start my business, purchase a van (cost +VAT) and stock. I've heard that if I have funded the start up myself, it can be classed as a directors loan? Does this means I don't owe any VAT or income tax until the amount I've invested is surpassed by earnings and VAT owed?
You won't owe any income tax but VAT is different.
The Loan should be entered as a Liability (you can use Director's Loan or similar account) with NO VAT code - the fact that you used it to buy the van is unimportant, the loan itself is outside the scope of VAT.
Similarly, repayments of the loan should be entered with NO VAT code.
@kevin_alpha_suds wrote:
Can I claim the VAT back I paid on the van?
Yes - provided you got a VAT invoice from the seller.
If the seller wasn't VAT registered you will not have paid VAT, so there is none to reclaim.
@kevin_alpha_suds wrote:
I started my business in October 2021. I understand my first VAT return can be submitted from Feb 1st 2022, and I don't have to submit a self assessment for Income Tax until end of January 2023?
Your VAT Registration document will tell you when the first quarter is due - sometimes the first return will cover more than three months. Usually, Oct/Nov/Dec VAT Return could be submitted anytime from Jan 1st. Submitting online you get one month & seven days to file - so 7th Feb would be the latest date.
Hope this helps.
