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What category for self assessment payment?
What is the best category to use for payments for self assessment? My initial reaction was to put it under PAYE/NI. Or is it a Net Salary Expense?
I’m wondering how something is done!
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Inappropriate?Hi Stuart
Thanks for that. I'm a sole trader, and I've paid my self assessment tax return out of my business bank account (similarly, when I was due a tax refund in the first year, this refund was credited to my business bank account). There doesn't seem to be an option for "private" payments in the categories. So my question is, how do I reconcile this payment?
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Inappropriate?I think it should be analysed as Salary & Bonus (902). I agree with you though that it isn't obvious. For sole traders I would have a heading "Drawings" or "Private payments"
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Inappropriate?I would think that you should pay the money out to your personal account, and pay it from there. I personally have a business savings account, but I treat the money there as personal savings - effectively I'm saving up for my *personal* tax bill in a *business* account. As a sole trader however, *I am* the business, so this is transparent. Just a bit of extra info... -
Inappropriate?I make a monthly payment to HMRC towards my SA out of my business account. If I've followed this thread correctly, I should account for these payments as drawings. Is that right?
(I'm a sole trader.)
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This answers the question
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And perhaps better to make the payment from my business account to my personal account and then off to HMRC from there? -
If you're a sole trader, all your business transactions should be done through your business account, and your personal stuff via personal account. Equally though, your tax bill is payable by you, not "the business".
In which case, it's better to look at it like this:
* If the business has an expense, pay it out of the business account.
* If you earn money via the business, pay it into the business account.
* If you want to pay yourself to spend money on beer, mortgage, personal items, these come from your drawings (natch) which you pay yourself from your business account into your personal account, either as you see fit, or as a salary (monthly DD, whatever).
* If you have to pay tax or NI bills, these are (as a sole trader) your *personal responsibility* - that is, they are *not* business expenses (ergo they are also *not* tax deductable) and should be paid out of your drawings (ie from your personal account). -
