Hi. As a sole trader I usually split my phone bill 50/50 for business/personal use. I can see how to split the bill but I’m not sure where to allocate it. I see that half would got to Telephone & Mobile but where would I put the 50% that is for personal use and shouldn’t be on the P&L?
Any help is greatly appreciated.
You’d only record the business half in QuickFile. When it comes to the payment, which is half business and half drawings, the easiest way to do it is to mark the money out of your current account as a transfer to your drawings account, then mark the purchase in QuickFile as paid from the same drawings account. The net result is that the purchase is paid and the drawings account balance has gone up by the private half of the bill.
Alternatively, you can split the bill between 50/50 between Telephone & Mobile and the other half to drawings. Then when you make the payment, it just goes against the invoice to pay it off.
This is fine as long as you’re not VAT registered, but the way QuickFile works even if you assign part of a purchase value to a drawings nominal rather than an expense nominal, the whole purchase value (including the drawings element) gets counted in box 7 on your VAT return.
I hadn’t realised that. Seems crazy.