Keeping records question

[Seahorse]

Ive never been clear on a certain part of keeping a record of incomings outgoings.

eg
Item £10
p+p £2

total £12

Do I record all the £12 as incoming then when I post it, record the £1.14 (for example)stamp as an outgoing.

[Poppy4lee]

Ive never been clear on a certain part of keeping a record of incomings outgoings.

eg
Item £10
p+p £2

total £12

Do I record all the £12 as incoming then when I post it, record the £1.14 (for example)stamp as an outgoing.

That's what I do. :)

[swirlyarts]

Yep that's the right thing to do!

[kipper workshops]

Yep, I agree.

Just think in two ways:

1. Log whatever money comes in - from any source!
2. Log whatever money goes out - for any kind of expense!

Stick with that and your taxman will be pretty happy!

Steve :):)

[Seahorse]

Coolio, thanks.

So when I get paid through paypal, I record the amount I take after paypal have taken their chunk of it?

[0103media]

Coolio, thanks.

So when I get paid through paypal, I record the amount I take after paypal have taken their chunk of it?

NO..

You charge £100
You pay tax on the £100

You put against tax the banking charge e.g. £2.50 to paypal..

[newcrafter24]

Not sure if I agree with this: Surely you only pay tax on PROFIT not INCOME, ie. if you charge £100 minus the £2.50 charge to Paypal, then your profit for that sale is only £97.50. You might then have other overheads that total say £50.00 (cost of materials etc.) which would drop your profit to £47.50. You would only pay income tax on the £47.50, not the original £100 selling price.

To keep your records right in this case, you would show £100 as income and £2.50 as expenditure.



NO..

You charge £100
You pay tax on the £100

You put against tax the banking charge e.g. £2.50 to paypal..