Filling in account book

[Beautyw]

hi guys

i have been keeping record of the takings/supplies etc my own way and not in an account book but now i have the time to fill in an accounts book i just have a few questions.

I had trouble opening an account with my bank and its took til now to get it opened so i just kept the salon cash with me and not in the bank ( as its my first year im not making that much) do i record this as petty cash? do i leave the bank section blank?

in my personal bank account i pay for my car/phone/car insurance - do i put this through as a wage? or can my car be put through the business? (im salon based)

if i was paying things for the salon that needed to be paid my card i used my personal card - do i record these bank transactions into the bank section even though its my personal account?

Thanks for taking a look at this
accounts and book keeping are so hard

xxxxxx

 

[jes]

I had trouble opening an account with my bank and its took til now to get it opened so i just kept the salon cash with me and not in the bank ( as its my first year im not making that much) do i record this as petty cash? do i leave the bank section blank?

No you cannot call it petty cash. Any money received (in what ever form) has to be recorded as takings or turnover.

in my personal bank account i pay for my car/phone/car insurance - do i put this through as a wage? or can my car be put through the business? (im salon based)

As your salon based you can only claim for business trips like buying stock and visiting your bank etc (@40p a mile I think), but you must record the mileage and dates of these trips. If the telephone is, solely, for business you can claim but if it's part personal and business you have to break down the itemised bills

if i was paying things for the salon that needed to be paid my card i used my personal card - do i record these bank transactions into the bank section even though its my personal account?

As long as you've kept receipts you can include them, BUT you will bring your personal bank account as well as your business one into your tax return. Should HMRC want to check your tax return they'll want to see all your bank statements and you'll have to account for any deposits, including personal ones. It's always best to keep business completely separate from personal.

HTH
jes

 

[Beautyw]

thanks jes, understanding it a bit now! so i don't need to keep receipts then for petrol if i'm just going to work and home....that wouldn't count as business?

As i was using my personal bank account for business as well, what happens if i was given money from a relative and bought something? would the hmrc want to know/need proof it wasn't profit?

don't worry, business account is all set up so it will be all separate now

thanks

 

[jes]

thanks jes, understanding it a bit now! so i don't need to keep receipts then for petrol if i'm just going to work and home....that wouldn't count as business?

Hi, yes that's just personal use and can't be counted. Just for information sake, car allowance can be worked out by the mile. If you do have a round trip of 3 miles to buy something from, lets say, Capital then you can claim 40p (allowance) X 3 (miles) but remember you have to have to keep the receipt from the supplier to back up the mileage claim and if you paid with a cheque you would have to have the bank statements for the account from where the cheque came.

As i was using my personal bank account for business as well, what happens if i was given money from a relative and bought something? would the hmrc want to know/need proof it wasn't profit?

This is exactly why you should keep business accounts separate from personal. You would have to convince HMRC that the deposit was a gift from a relative and not profit from services provided or a sale.

HTH
jes

 

[Beautyw]

ok, i think im understanding it now. thanks for the info. was confused on the petrol situation, some people are saying to keep petrol receipts for all petrol and then others are saying not to lol but thanks for clearing things up xxxxx

 

[jes]

Ok, Like you, I'm a salon owner and don't bother claiming motoring expenses, but this is my understanding of how it works. I make no claims my understanding is totally correct and I apologise if I've got it wrong, but here we go...

There's two different ways of claiming motoring expenses. You can keep all your petrol, mot, insurance and servicing receipts etc. You can even throw in the cost of a new vehicle if you brought one. But if the vehicle is used for business and personal use you have to record the mileage for every business and personal journey and then work out what percentage of business use the car is being used for. If it turns out the car is used 25% for business use then you can claim 25% of the motoring costs and expenses.

The other (much simpler) way is to claim the fixed 40p per mile allowance. This is the only allowance you can claim, you can't claim any other costs like petrol, insurance or mot's etc. Again you have record the business and personal mileage of the car. If the car has been used 25% for business and you've done 10,000 miles for the year then you can claim 2,500 miles X 40p (£1000) as an motoring expense.

Basically the first method is recommended if you car has high running costs, has needed a lot of repairs or, obviously, you've brought a new one during that tax period but otherwise the second way should be better.

After all that waffle, I should have mentioned that even if you don't want to use motoring receipts in your return it's still worth keeping them

jes

 

[Beautyw]

lol yeah second method sounds good, well i haven't been doing the miles thing so ill have to scrap the petrol situation lol.

so any car bills etc that isn't used for the business is put under wage then?
xxxxxxx

 

[jes]

so any car bills etc that isn't used for the business is put under wage then?xxxxxxx

erm... no, It's good practice to keep all receipts but if you don't want to declare them, just don't do anything with them

jes

 

[weegirl10]

sorry i didnt explain right, for car insurance and personal phone bill, i put under wage?

 

[jes]

No, if you're not recording your business mileage you can't claim any car insurance. If you could claim 10% of your total mileage as business use then you could claim 10% of your car insurance. Or you could claim 10% of the total mileage at the 40p per mile allowance (this will cover all motoring costs though)

Your personal phone bill cannot be used either because it is 'personal'

 

[Beautyw]

I sent you a pm
xxxx