Self-employed profit/loss account

[Mila]

Dear All,

I am preparing the accounts/tax return for my company, I am a sole trader. Could somebody tell me to where bank loan repayments go in profit/loss accounts or is this information used only for the balance sheet? Also, are loan repayments tax deductable as well as the interest on the loan? Please, help!

I look forward to hearing from you all soon.

Thank you very much for provided information in advance.

Yours faithfully

Nada

[deanshepherd]

The interest accruing for the year will show as a deduction in the P&L.

The repayments will go against the loan account in the balance sheet.

A greater proportion of interest can be deducted in the earlier years of the loan.


Dean Shepherd
dean.shepherd@mmi-online.co.uk
MMI Accountancy
www.mmi-online.co.uk

[King_Maker]

I assume you are a sole trader, although you mention company also?

You need to separate the interest and capital elements of the loan repayments. The former goes to P&L and the latter to the Balance Sheet.

Only interest is tax deductible, assuming the loan is for business purposes.

[Mila]

Thank you very much all!