Disallowable expenses reporting in financial statements

[asadrana]

Hello everyone,

Hope you all are doing great!

I prepare accounts for sole traders from their business bank statements, and directors incur some expenses which relate to business not personal like office gym expenses for employee which are not tax deductible. May these expenses as a whole be reported in annual accounts to calculate accounting profits?

Looking forward for your prompt response.

Thanks!

[QFSteve]

Hello @asadrana

Personal expenses should be tagged to the drawings account

Here is a similar query from the forum

Personal Expenses

Hi Guys, I have now moved on to using QuickFile from this tax year forward so I am getting to grips with the basics. This is probably a simple question but on the odd occasion where I use my Business account for a Personal expense how do I go about recording this - Is it just a case of tagging it to the Proprietor Drawings Account or do I simple delete the entry from the statement and leave it untagged? Hopefully this makes sense! Thanks in advance

[cbstephensaca]

I’m not entirely clear what you’re asking here. For starters, are you talking about sole traders or limited companies as you are mixing the two terms. Sole traders are self-employed and directors run limited companies.

Are you talking about business expenses or personal expenses? If you are talking about benefits provided for employees, why do you think these are not tax deductible?

It sounds to me like you may need to speak to an accountant.