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paypal fees - tax expenses to offset ?

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  • paypal fees - tax expenses to offset ?

    hi
    could anyone possibly tell me if paypal fees and charges for currency conversions within a paypal account can be offset against your tax bill ? your help would be much appreciated.
    thanks for reading !
    diane
    Diane
    www.tailormade.etsy.com

  • #2
    Yes, they can. They're a legitimate business expense.
    Celia
    I can't be creative and tidy too
    www.jencel.co.uk for beads, findings and threads
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    • #3
      Originally posted by jencel View Post
      Yes, they can. They're a legitimate business expense.
      thankyou x
      Diane
      www.tailormade.etsy.com

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      • #4
        I asked this question at a recent Tax office workshop and was told to put them under bank charges as paypal is a financial insitution.

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        • #5
          Originally posted by xavtia View Post
          I asked this question at a recent Tax office workshop and was told to put them under bank charges as paypal is a financial insitution.
          Yep mine always goes under bank charges.
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          • #6
            I've been wondering about this just recently whilst doing my accounts, as I have had a couple of customers pay me from abroad and have of course had the Paypal fee deducted from what I charged.

            What I did was to simply put down on my tax return the amount of money I actually received after Paypal had taken a cut and after it had been converted to GBP. Is that the wrong way to do it? Should I instead have written down the amount I actually charged the customers, and then put in a claim for what I lost on the conversion and charges?
            Advice would be much appreciated!!
            Pencil portraits and children's portraits from photos

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            • #7
              I normally put down the full amount charged and received in the receipts section then the paypal charges as bank charges

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              • #8
                I always put the total of the sale, including P&P - so if a customer pays me £38.99 that's what I enter into my Sales record - I partly do this, as I like the figures to match so if the Taxman were to look into my PayPal records they'd see the total of the sale...

                Then, in my purchases and banking records I put the total PayPal fees for each month...as others have said - under banking...
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                • #9
                  I can now answer my own question, after a meeting with an accountant!
                  Yes, any income you have charged the customer counts as part of your total income, and you should declare it even if the amount you received after Paypal charges is less. Then, you list those charges as part of your expenses and recoup the difference.
                  I'll do it right next year!
                  Pencil portraits and children's portraits from photos

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                  • #10
                    Its an expense as everyone has said

                    I keep $ euro and £ so have to use the exchanges rate from the GOV see them here http://customs.hmrc.gov.uk/channelsP...atesCodesTools

                    If your withdraw them straight away then the GOV aren't going to care about that.
                    .


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