Cash Basis Queries

[Shippy92]

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

Cheers,

David

[robbob]

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]

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