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Where Taxpayers and Advisers Meet

Cash Basis accounting question

Phil1744
Posts: 5
Joined: Fri Feb 01, 2019 1:54 pm

Cash Basis accounting question

Postby Phil1744 » Sat Feb 02, 2019 10:02 am

Hi all,

I'm struggling to find a clear answer on this;

I use cash basis accounting as I'm a sole trader, and earn a relatively low income and the business is fairly new.


I'm about to buy a new van. Does the total van value go through in one go? A business expense??
Also, its made up from, my money, a family loan, gifted money, and a tiny bit of finance!

Also the old van is being part ex'd towards it. Does that get recorded?


Thanks so much in advance!

Phil

bd6759
Posts: 3090
Joined: Sat Feb 01, 2014 3:26 pm

Re: Cash Basis accounting question

Postby bd6759 » Sun Feb 03, 2019 5:37 pm

Yes, the van is an expense.

In strictness the amount received for the old van is income and the full amount payable for the new van is an expense.

In practice, only the net amount after the PX is decuted is charegd as an expense.

Phil1744
Posts: 5
Joined: Fri Feb 01, 2019 1:54 pm

Re: Cash Basis accounting question

Postby Phil1744 » Mon Feb 04, 2019 4:34 pm

Thanks ever so much

So do i put the whole net amount through in one go? Even though theres family loan / vehicle finance involved?

And then put the vehicle finance interest through each month?

Phil1744
Posts: 5
Joined: Fri Feb 01, 2019 1:54 pm

Re: Cash Basis accounting question

Postby Phil1744 » Fri Feb 08, 2019 10:00 am

So I would put through the full net amount even though I havent actually paid that money out yet?

bd6759
Posts: 3090
Joined: Sat Feb 01, 2014 3:26 pm

Re: Cash Basis accounting question

Postby bd6759 » Fri Feb 08, 2019 12:02 pm

Yes. The whole amount can go through despite the loan.


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