Tier 1 General Extension - Sole Trader

[zen135]

Hello Experts,

I would be showing my income as a sole trader running my own business for my Tier 1 Extension.

I would be submitting my bank statements showing the payments made into my account by clients.

Plus, I would be showing a Profit & Loss Account prepared by my Chartered Accountant, showing the net profit before tax.

I have two questions:

I pay VAT on my turnover. Do I have to deduct the VAT to reach my 'net profit before tax' figure? If yes, under which section should be it be deducted under? I've five sections in the P&L Account - Turnover(which includes my income incl. VAT), Costs, Gross Profit, Expenses and Net Profit. Should I deduct VAT under the 'Turnover' section to reach the Net Turnover or show I deduct it under 'Expenses'?

Do I also have to prepare a Balance Sheet for my business or is it not necessary?

I would really appreciate any advice on the above matter.

Thanks in advance.