Correct Categories and Recording

[Parker1090]

I just wanted to check to make sure I understand this correctly, and how I should be accounting for it on Quick File.

1. I understand that as a sole trader, if the business makes a donation (gift or money), this actually comes out of my personal allowance rather than something separate for the business. How would this be accounted for if it was paid for through the business bank account? Would this be nominal code 8200?

2. I’m under the impression that if I go out for a meal, or a tea/coffee etc with a potential client, this can be classified as ‘Entertainment’. Is this correct?

Thanks in advance!

[Joe]

I understand that as a sole trader, if the business makes a donation (gift or money), this actually comes out of my personal allowance rather than something separate for the business. How would this be accounted for if it was paid for through the business bank account? Would this be nominal code 8200?

You may find the following posting helpful:

How to Record Donations To a Charity / Gift Aid

If you’re trading as a sole trader (self-employed), you will pay Income Tax as an individual on your business profits. Therefore you can take advantage of the tax reliefs on gifts of money to registered charities by claiming them on your Self Assessment tax return.

I’m under the impression that if I go out for a meal, or a tea/coffee etc with a potential client, this can be classified as ‘Entertainment’. Is this correct?

With certain exceptions, expenditure on business entertainment is not allowable as a deduction against profits, even if it is a genuine expense of the trade or business. Although, travel and subsistence expenses are allowable, such as travel, meals and accommodation, if you pay for those costs in part or in full, therefore you may want to flag these transactions with your accountant to see what can be claimed.