How to Add PAYE Income from an Employer into FreeAgent

Hello David,

That's right.

If your second company pays your salary into your freelance business's bank account, then you'd need to explain it as above, and record it for tax in Self Assessment.

But if your salary is paid into a bank account that you're not monitoring as a business account in FreeAgent, then you don't have to explain it in the bank, just record it under Self Assessment.

Kind regards,

Emily

Hello David.

FreeAgent's tax computation unfortunately isn't that clever! It won't account for property income nor for payments on account.

If you've received those figures into your business's bank account, you'd need to explain them as Money Received from User > Capital Introduced so that FreeAgent doesn't work out income tax on them.

And for the PAYE and income from your second company, you do need to put that in all in one go at the end of the tax year.

Apologies for these limitations!

Kind regards,

Emily

Hi David,

Re the property income, yes, that is taxable.

But it doesn't get added to your self-employed figures in your tax return, which is why you can't add it all up together in FreeAgent.

When you do your tax return, you'd have to put your property income (and expenses) all on a separate page. So yes, you'd need to explain that as capital introduced and tally it up separately when you come to do your tax return.

There is, unfortunately, no way to record property accounts in FreeAgent's Self Assessment area, so you would need to use alternative tax software such as HM Revenue's online filing system, and the tax figure in FreeAgent will be short of what you'll pay.

As for the payments on account - my apologies, I didn't explain that clearly. The figures you explain as capital introduced would be the property income, the payments on account would need to be explained as Money Paid to User > Drawings.

You're right that a lot of self-employed people do have to make payments on account and we do hope to be able to add these to the Self Assessment computation.

But in the meantime, I would suggest that you use another application to work out your full tax bill, as your tax affairs - with the inclusion of property income - are slightly more complicated than average.

Kind regards,

Emily

Hello David,

Because you've got that account set as a personal account, you can't use the Money Paid to User option on it.

I presume you've explained the entry in your personal account as Invoice Receipt for that invoice, is that right?

What happened to the money after it was paid into your personal account, please? Did you transfer it to your business account?

Kind regards,

Emily

Hello David,

No problem at all, it does take time to get used to a new system.

It sounds to me like you've done everything right.

Re the invoice, if you've marked it as an Invoice Receipt into your personal account and you didn't then transfer the money into the business, then that's all you need to do (as you're a sole trader rather than the director of a limited company, there are no tax issues there).

Re the expenses, the business doesn't have to pay them back to you in order for it to claim tax relief on them. Tax relief kicks in as soon as you enter them in the Expenses area. They can just sit there happily until (if) the business has enough money to pay you back. You're entitled for the business to pay you back so you entered those correctly.

Does that put your mind at rest, please?

If you're still not sure, or if you have any other queries, please don't hesitate to ask.

Kind regards,

Emily

Hi David,

OK, not to worry. If you want to clear it all down, here's how:

1) Mark your personal account as a business account (assuming you haven't uploaded any unexplained transactions into that account).

To do this, click on the personal account on the list under Banking, click the Edit Details button and untick the little box at the top that says "This is a personal account". Save the changes.

2) Check to see how much you have outstanding as expenses, which you want to clear down.

3) Record a payment from what was your personal account, for the total of the expenses to be cleared. Use type Money Paid to User and reason Expense Payment. That will clear off the expenses.

4) Then for the remaining balance outstanding on your personal account, clear that off with, from that account, either a payment of Money Paid to User > Drawings (if the amount of the expense payment was less than £1,000), or a receipt of Money Received from User > Capital Introduced (if the expense payment exceeded £1,000).

The balance in your personal account will then be £nil.

If you do get stuck with your profit numbers then do let me know - if you'd prefer to keep that off the public forum, please send your query to support[at]freeagentcentral[dot]com

Kind regards,

Emily

Hi David,

There are two places in FreeAgent from which you can export your data:

1) Go to Accounting > Trial Balance for the year in question and click on either "Summary CSV" (for totals) or "Transaction CSV" (for a breakdown of your accounts);

2) Go to Home and on the left-hand menu choose "Export Data".

One or other of these might help?

Kind regards,

Emily

Hello David,

You can't at the moment print the P&L or the Balance Sheet out as a .pdf, though we are looking to introduce this.

If you do get stuck with anything else please don't hesitate to ask.

Kind regards,

Emily