Hi, I’ve read the forum and can’t find an answer - so I thought I would post a new topic.
My proprietor drawings are accumulating, I’m wanting to start the proprietor drawings account at zero for this tax year. At the moment, all it shows is what I have drawn out each month for 2015 (when I set up my business and 2016). How do I put a line under tax year 2015 so I can distinguish what I have taken for this tax year.
Hope you can help,
Drew.
Hi @Drew2
You would need to journal them to the correct nominal code. There’s a guide in one of my previous posts here:
Sole trader drawings on P&L
Let me know if you need any help 
Thank you, I’ll give it a go but will give you a shout if I get stuck.
Thanks,
Drew
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Hi Mathew, I’ve read the suggested guide and I’m more baffled than ever. Can we start with the basics please. How do I set up this capital account as I can’t find “chart of accounts”, I can find my Bank management page…
When you say “add my capital”, Is that just a lump sum of all I earned for the last financial year or each individual amount?
Kind regards,
Drew
Just had a Eureka moment and have set up the capital account. Next stage…When you say “add my capital”, Is that just a lump sum of all I earned for the last financial year or each individual amount?
Drew
Great!
It doesn’t matter if it’s a lump sum or multiple payments. What matters is the total value and the tax year it’s posted in. For example, if the transaction was in the 2014/15 tax year, don’t post it in the 15/16 tax year.
Hope that makes sense?
OK, so all I have in my proprietor account is the money (wage) I have paid myself from my business account (General Bank account) via transferring it across each month. Should I go to the business account, click advanced, type in the last tax year (6th April 2015 - 5th April 2016), bring up the “credits” for this period of time, locate the net value and enter this amount into the proprietor account as the capital (money the business has made) introduced?
Kind regards,
Drew
Hi Drew
If your reporting period for HMRC is the same as the tax year, then yes, looking up credits for that period is correct. Except, you would do it on the Proprietors Drawings Account as this will then only shoe you your drawings/capital transactions. Also, credits in a bank account would be money coming in, not going out. This means money coming into your Proprietors Drawings Account is your drawings (money you take from the business). Your debits (money going out) would be capital introduced. As you’ve only got drawings coming into the account, you have no capital to record.
If you take a look at the post I linked to above, there’s actually a little gif showing you how to find this out and a description on how to record it.
So all you need to do to zero the account would be to create a “money out” transaction on the proprietor drawings bank account on the last day of the year, for the same amount as the balance of the account on that day, tag it as “something not on the list” and assign it to the drawings nominal code under “capital and reserves” (I believe it’s 3100 but I can’t check on my phone).
Thank you, what I was getting confused at was trying to locate the capital which wasn’t in the account. After entering in to the journal the drawings for the last tax year as both a debit (nominal code 3100) and a credit (nominal code 1202) it has now given me just the balance for drawings for this year. Phew!! Thank you for all your help.
Kind regards,
Drew
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Yes, that journal entry has the same effect as the “something not in the list” tagging I suggested. When you’re journaling entries into a bank account (1202), money in is a debit and money out is a credit, which is the reverse of how bank statements normally look (because they’re the bank’s view of you, whereas QuickFile is your view of the bank).