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Where Taxpayers and Advisers Meet

Cash Basis Queries

Shippy92
Posts: 2
Joined: Tue Apr 16, 2019 11:20 pm

Cash Basis Queries

Postby Shippy92 » Tue Apr 16, 2019 11:26 pm

Good Evening,

Newbie here :)

I just have a couple of quick queries regarding Cash Basis accounting for my small photographer business (sole trader):-

1. Loans/Credit Card - I purchased some new equipment in 2018/19 using credit. Do I need to record this as one expense OR record an expense for each individual monthly repayment? Seems to be a bit of a grey area.

2. Sale of old equipment - I also sold some older Camera equipment that was brought for the business in the past. Do I need to show this as income or not?

Any help would be greatly appreciated and I look forward to using these forums over the coming weeks/months :D

Cheers,

David

robbob
Posts: 2782
Joined: Wed Aug 06, 2008 4:01 pm

Re: Cash Basis Queries

Postby robbob » Wed Apr 17, 2019 8:08 am

1. Loans/Credit Card - I purchased some new equipment in 2018/19 using credit. Do I need to record this as one expense OR record an expense for each individual monthly repayment? Seems to be a bit of a grey area.
The equipment has been paid for (you now owe credit card company/loan company not equipment supplier) so make the claim at the time the equipment was financed or date cash element was paid
2. Sale of old equipment - I also sold some older Camera equipment that was brought for the business in the past. Do I need to show this as income or not?
Yes it is counted as income- it would be silly (silly good :) not the case tho :()if you could buy a camera for 5k monday claim 5k expense and then sell it tuesday for 4.9k and have no tax to pay on that income - add this income to your sales.

Note if your finance costs exceed £500 per year you may be better off leaving the cash basis due to the £500 finance costs claim limit.

Shippy92
Posts: 2
Joined: Tue Apr 16, 2019 11:20 pm

Re: Cash Basis Queries

Postby Shippy92 » Fri Apr 19, 2019 1:09 am

1. Loans/Credit Card - I purchased some new equipment in 2018/19 using credit. Do I need to record this as one expense OR record an expense for each individual monthly repayment? Seems to be a bit of a grey area.
The equipment has been paid for (you now owe credit card company/loan company not equipment supplier) so make the claim at the time the equipment was financed or date cash element was paid
2. Sale of old equipment - I also sold some older Camera equipment that was brought for the business in the past. Do I need to show this as income or not?
Yes it is counted as income- it would be silly (silly good :) not the case tho :()if you could buy a camera for 5k monday claim 5k expense and then sell it tuesday for 4.9k and have no tax to pay on that income - add this income to your sales.

Note if your finance costs exceed £500 per year you may be better off leaving the cash basis due to the £500 finance costs claim limit.
Thank you for your helpful response! Really appreciate the help :D


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