Accounts question

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Becky_simon

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Hi there

I am hoping someone can shed some light! If I had a loan to get my business up and running, but my business wasn't paying it off do I (my business) have to record this?

Basically My husband wanted to help me out so he paid my monthly fees due for my loan and then when he had the chance he paid the whole lot off.

How do I record this on my accounts? Surely it changes things as I wouldn't have to record anything as it wasn't my money paying for it?

Help please :)
 

Steph86

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Hello, I was in a similar situation.

My mum put my start up costs on her credit card, I then paid her back out of my normal wages (not my beauty business) but obviously I am still to 'breakeven' as all my profuts has been spent back on the business for products.

When I did myself assesment it didn't ask where did the money come from, just what I've spent and what I've earnt- if that makes sense. So your business will be allowed to earn that money back-and you can pay your partner back-if that's what you were hoping.

Don't know if I've explained myself very well- if not, sorry xx
 

Beansy

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You just record it as income in to the business. It doesn't matter whether the money is your own, a loan from a bank or from someone else, it is still classed as income.
By recording it as part of the business you will then show how you have cleared the debt.
Hth
 

Becky_simon

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You just record it as income in to the business. It doesn't matter whether the money is your own, a loan from a bank or from someone else, it is still classed as income.
By recording it as part of the business you will then show how you have cleared the debt.
Hth
If I put it as income, what do you label it as? It will be a substantial sum! Then would I note all my outgoings like consumables to show how it was spent?
Then as you say how it is paid off is irrelevant!
 

persianista

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You class it as a directors loan
 

Becky_simon

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You just record it as income in to the business. It doesn't matter whether the money is your own, a loan from a bank or from someone else, it is still classed as income.
By recording it as part of the business you will then show how you have cleared the debt.
Hth
Where/How to I show on my accounts that I have cleared the loan? It was cleared in Mar (I think) poss April (will check my statements).
 

Becky_simon

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Please surely someone knows! X
 

cherrybaby

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Hi,

You can't call it a director's loan if you are a sole trader, directors don't exist in non limited businesses.

It really depends on what "accounts" you are referring to. The way accounts are done for self assessment are slightly different to the way they are done under usual accounting practices (eg. Capital Allowances don't come into Statutory Accounting procedures but they do in terms of self assessment) I am assuming that you are just talking in terms of self assessment completion. It would be included as a capital injection IF you were doing a Balance Sheet but this is not necessary for self assessment. It would not appear in a P&L. Classing it as income is incorrect as it is not generated by your trade. The self assessment process is purely to assess the profit or loss of your business ie. how much income your business has generated and how much that has cost (in incredibly simple terms). In which case, the loan is compIetely irrelevant both in terms of it's introduction and it's payment so it should be ignored completely. If you want to understand this further I would suggest a call to your local tax office as they can be very helpful. Failing that, you need to engage the services of an accountant.

Hope that helps a little.
 

Hunnie

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The cost needs to be treated as capital :biggrin:.

You should employ a accountant who will do all your financial statements for you ( p&l, balance sheet, c ash flow statement etc).

Try Mazuma money there very good value for money

Sarah xx
 

Becky_simon

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The cost needs to be treated as capital :biggrin:.

You should employ a accountant who will do all your financial statements for you ( p&l, balance sheet, c ash flow statement etc).

Try Mazuma money there very good value for money

Sarah xx
If I treat it as Capital where on my accounts do I put it? And where do I show I payed it off?
Yes I'm trying to do my SA but I'm do trying to fill out my P&L sheet x
 

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