Hi,
I’m considering using the new simplified flat rate expenses scheme recently introduced by the HRMC where you just quote the number of hours you have worked in your Home Office.
What would be the best way to record this in QF? Should I just note down my hours each month and then add a new ‘purchase’ each month in QF?
Fristly, this scheme can only be used by Sole Traders, Limited companies or limited liability partnerships can’t use simplified expenses. Secondly, you can only use simplified expenses if you work for 25 hours or more a month from home.
We would also recommend you refer to the GOV.UK checker.
That’s correct, simply raise a purchase invoice and allocate the costs to outgoing type ‘Use of Home As Office’ and pay the invoice from the ‘Proprietors Drawings Account’.
Thankyou for the confirmation. I am a sole Trader working for more than 25hrs per month so I am eligible. I havent quite got my head around what the purpose of the ‘Proprietors Drawings Account’ is for as I have already setup my current bank account in QF.
If you have a business account and are reimbursing yourself the expenses, then simply tag the reimbursement payment to the purchase invoice.
I am using a personal bank account, I will not be reimbursing myself as such. I just want to record them as expenses each month. I believe at the end of the tax year I can then show them as expenses on my SA return.
Or am I thinking about this entirely the wrong way?
For completeness, simply pay the purchase invoice from your ‘Proprietors Drawings Account’. See the posting below (click posting to expand).
Thankyou for all the help. I’m still a little bit confused, if I add the purchase to the ‘Proprietors Drawings Account’ what do I do with my actual current account i’ve setup in QF?
From what I understand you don’t have to do anything. By tagging the invoice to your Proprietors Account it’s as if you are making the payment out of your own pocket, so to speak, which you kind of are. Your current account has nothing to do with that. If you make a personal withdrawal from your current account (drawings) then you can tag this to your Proprietors Drawings Account. Think of it as paying yourself wages, accept it’s just classed as drawings when you are self employed. I believe this is the case, someone can correct me if I am wrong.