Singing Pig

Hi

Just a quick query please, I am new to bookkeeping.

I am a sole proprietor and started my business in May 2005.  I am about to file my first Annual Return and so am making sure my books are up to date.

I have made several payments into my business account to aid cashflow.  Should I enter this as "income"?  If I do, then surely this becomes taxable as income?  Or, do I call it a "loan" to my business?

I would be grateful for any advice.

Many thanks,

Wendy

You do NOT treat it as income. If you do you will be taxed on it.

If you are a sole trader then you do not disclose cash injections at all. All you disclose are your income and expenses for running the business.

I would suggest that if you do not know the answer to a simple question as above, you should seriously talk to an accountant. If you have a small business it may only cost a couple of hundred pounds, but trust me, it is worth it.

You obviously don't know what is treated as income, so do you know what is treated as allowable expenses? If you make a mistake it could cost you hundreds of pounds.

Talk to a local accountant and get a fixed fee up front.

Thank you for your reply Pete.

I have a couple of books on bookkeeping for small businesses and tips on paying less tax (which covers allowable expenses), I just could not find the answer to my question re cash injections or perhaps I was looking in the wrong place!

I shall remove the entries from my ledger, thanks again Pete.

Wendy