Nails business bank account tax

[tash_louise]

Help I have opened a new bank account so any earnings from my nails will go into there and anything I buy for business come out of it I have contacted hm rev and set up business with them
How do u all pay yourselves do u pay yourself a wage out of ur business account? I can't get my head around it as husband says you can't just take money out of the account as it's your business u need to show where the money goes even though I will be earning it doesn't mean I can just take money out
How do u all get money out of ur business please?
So complicated argh

 

[Trinity]

I do a bank transfer into my normal bank account. This has my bank details on it so it shows where it's gone. The amount I transfer will be the same as my end of month earnings on my income/outgoings spreadsheet.

I think you're over thinking it, you can put in and take out as much money as you want as long as you can show the HMRC with receipts and book keeping, how much you earned and how much you spent there is no issue.

 

[JanVenus]

Sometimes you can put a note on transfers if you bank online, if you don't do this then put it in your books as 'proprietor's drawings'. That's what the folks at Business Enterprise told us anyway.

 

[tash_louise]

I do a bank transfer into my normal bank account. This has my bank details on it so it shows where it's gone. The amount I transfer will be the same as my end of month earnings on my income/outgoings spreadsheet.

I think you're over thinking it, you can put in and take out as much money as you want as long as you can show the HMRC with receipts and book keeping, how much you earned and how much you spent there is no issue.

So do u transfer everything u make? It's just hard to get my head around and how people do it thanks

 

[Trinity]

So do u transfer everything u make? It's just hard to get my head around and how people do it thanks

In really simple terms I use an excel spreadsheet - every day I enter the name of the client, what they had done and the cost.
I total this at the end of the month (for instance £1000).
Then I deduct 1/12th of last years outgoings (things I purchased - files/polish/electric/etc.) - lets say £1200 for the year, so £100).
That leaves £900. Then I deduct 20% for my tax - £180 -
that leaves me £720 for my wages,
and thats how much I transfer to my normal bank account.
That figure will also be on my spreadsheet.

I might not actually pay 20% in tax once any deductions have been made and I may spend more than £1200 on stock but I have it saved each month ready for the end of the year bill, or for bill paying as I go along. Even if I haven't saved enough from that calculation its near enough that I'm not panicking trying to find the money to pay my tax bill at the end of the year. If I've saved too much then I just give myself a bonus at the end of the year. Its my earnings, I've declared them, they're just being saved for the end of the year.

 

[JanVenus]

The Government's living (hah!) wage is set at £7.50ph for over 25s from April this year. That would be 292.50 per week working 39 hours per week. You could pay yourself (i.e transfer from your business account to your personal account) minimum wage each week and then monthly or quarterly you could give yourself a bonus if there's excess in your business account. Transferring all your takings out would be a bad idea as it's good to have a 'float' for emergency purchases - remember everything you buy for the business has to be accounted for and it's easier to do that if you pay for it using your business account.

 

[CFBS]

I pay myself at the end of each month sending an online payment from my salon account to my personal one labelling it 'salon wages'.
I then enter this amount into my accounts as a 'drawing'.

If I take some cash out of the till for myself then I record this as a cash drawing from the 'till account'

I pay all my bills first, see how much is left, leave a bit in the bank account and then pay out the rest to myself.

I also have a salon savings account where I put bits of money I want to hide from myself to pay for tax or any equipment I'm saving up for.
[emoji3]
I hope that makes sense!

 

[asteropi]

I pay myself at the end of each month sending an online payment from my salon account to my personal one labelling it 'salon wages'.
I then enter this amount into my accounts as a 'drawing'.

If I take some cash out of the till for myself then I record this as a cash drawing from the 'till account'

I pay all my bills first, see how much is left, leave a bit in the bank account and then pay out the rest to myself.

I also have a salon savings account where I put bits of money I want to hide from myself to pay for tax or any equipment I'm saving up for.
[emoji3]
I hope that makes sense!

I loved the part about hiding money from yourself!

 

[squidgernetball]

You can do what you want with the money if you're a sole trader.

If you take £10,000 and it has cost you £3000 to run your business, your left over money is £7000. This would be classed as your "wage". As it's under the £11000 mark - the approximate amount you can earn before you pay tax - you don't pay tax.

If you take £15000 and it's cost you £2000 in expenses, your leftover is £13000 and you would pay tax on it.

HMRC don't care how you "pay" yourself. If you're a sole trader, you simply show income and expenses. All that's left is yours to do with what you will.

You can make it as hard or as easy as you want.

Vic x