Hello, I am very new to this, and need help setting up please.
I have added open banking and added 3 months April to date accounts, but i cannot see any bank charges or drawings in the tags? Also where do I add bank charges ?
Any help appreciated!
Many Thanks
Amanda
Tag your bank charges as something not on this list then type bank charges in the drop down.
Drawings same method but pick proprietor drawings account or directors loan account depending on sole trader or Ltd Co.
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Thank you, that’s very helpful.
Could you possibly help with two other questions please.
Toll Dartford crossing charge what categories would that come under , vehicle finance what would that come under?
You can put Dartford toll under travel
Vehicle finance isn’t straight forward.
Is it a lease or hp?
Are you a sole trader or Ltd company?
Is the vehicle solely used for business or personal also?
That kind of question should be directed to an accountant as an incorrect posting could cost you money in underpaid tax.
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Good advice, thank you!
Hi just to tag along on this thread
If I was to upgrade my sole trader business account to the ÂŁ5 a month plan that includes invoicing etc.
When tagging that as bank charges does that reduce your Total profit and loss each month?
Edit:
I just did add a transaction to test it snd it does. So will HMRC allow that as a real business expense as that will reduce my companies profit over the tax year. Making our tax less technically?
Every business expense reduces your taxable profit so I don’t quite understand your point.
Whether it’s a business expense or not would depend on what you receive for that £5 per month.
I don’t always understand my own point either. Im new to all this
That was the idea of what i was asking. I was under the understanding that a business bank account would not be reduced from the total profits.
Bank charges are indeed an acceptable business expense.
But paying ÂŁ5 per month for benefits is not bank charges, which is why I said it depends on what that ÂŁ5 is for.
The ÂŁ5 would be for the Pro version of the business account which would include more benefits
I understand that. I’m asking what the benefits are.
Basically, any business expenses, for example, an expense to carry out the purpose of running your business is an allowable expense.
100% claim is usually set to wholly and exclusively for the purpose of running your business.
If part of the expense is for private usage, then you pro ration the percentage into a fair acceptance.
For example the ÂŁ5 expense you state, if it gave 50% business account help, then 50% or so personal / private benefits, then you would claim ÂŁ2.50 of such expense. If it was only for giving business account benefits, then you would claim the full amount, and so on.
Thanks
Eddie
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For any expense, the test is to look at whether it is “wholly and exclusively” for business purposes. If the answer is yes, then claim 100%. If no, then you would need to apportion it between personal and business and split the cost on that basis. This can be done in one go at the end of the year prior to finalising your accounts, unless you are VAT-registered.
If you’re VAT-registered, then you need to split each transactions that carries VAT, as you can only claim VAT back on the business element, and not the personal.
In your example, if the ÂŁ5 gave you additional business benefits, such as a free overdraft on your business account, then that would count as a business expense. If however, one of the benefits was discounted home contents insurance, that would be personal so you would need to consider whether you need to split the ÂŁ5 out.
If you’re still unsure, I would ask your accountant.
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