[ronnie paton]

after playing on window cleaner pro i notice when you go to accounts it incluses all outstanding debts has sales is this correct??? i thought you only declare what you have been paid(if you understand?)

[L.J.Thorpe]

you have to declare any money owed on your tax return
as part of gross i think

[ronnie paton]

really?? myaccountant never asks for this, so why do you pay tax on it has you may never get paid???

[dave0123]

You put down all money earnd. then expenses come off inclduings bad debts.

[ronnie paton]

but surely you havent earnt it till you have been paid???

[dave0123]

Thats how i thought it was .. but no aparently thats the way its done

[ronnie paton]

oops well iv only ever declared what iv been payed, iv never had payments not recieved so if say i do a commercial on the 4 of april i leave it till i get paid in the new tax year.

if i do has i should this year i would be paying some of last years tax then wont i??

[NWH]

You have to declare money outstanding for that TAX period so they can calculate your bill in full.

[ronnie paton]

but if its money outstanding near the end of the tax year and you dont get paid you will have paid tax on this.

[L.J.Thorpe]

yes but you dont declare it next year do you
geddit

[pdale]

If you send an invoice you should put a date on it, or "tax point". You may notice tax points on invoices for expenses.

The invoices of these "tax points" that fall within the tax year are what should be declared, paid or not.

Of course if a debtor fails to pay his invoice then this would go down as a bad debt, which is deductable.

Paul

[ronnie paton]

ye i understand i just wish the accountant would of informed me so now i will be paying tax on a few payments that came in at the beggining of the year(from the end of the last tax year) and also on payments not recieved aqt the end of this tax year.

[ianhannaford]

Ronnie,

Last year the the Inland Rev bought out a new scheme called Cash Accounting.

Previously you had to declare all money you charged for, even if you did not collect any money. This was called Invoice Accounting.

When they introduced Cash Accounting this means you can declare on the actual money you have collected in your business rather than on the money you have charged. In Window Cleaner Pro you can see both values and choose which scheme you prefer. This is what Collected/Charged drop down box on Accounts are.

Hoep this makes sense


Ian

[L.J.Thorpe]

if you have done it the way you said then you will have declared on those at beginning of year
then just declare on the ones you did not get on this years
as long asyou declare it al no worries in the end
the post by pdale sums it all up perfect tho

[ianhannaford]

If you send an invoice you should put a date on it, or "tax point". You may notice tax points on invoices for expenses.

The invoices of these "tax points" that fall within the tax year are what should be declared, paid or not.

Of course if a debtor fails to pay his invoice then this would go down as a bad debt, which is deductable.

Paul

This was correct previously but if you choose to employt the new Cash Accounting scheme then you only declare once you have received the money, not invoiced for it.

Ian

[ronnie paton]

thanks ian so my account is doing her job!!

this helps ian thanks again

[Moderator David@stives]

It doesnt matter to the tax man as long as you are consistant.

You can either use the Turnover or the cash recieved figure.

Once you start you have to stick to it.

I use the turnover figure regardless if I have been paid or not.

[L.J.Thorpe]

It doesnt matter to the tax man as long as you are consistant.

You can either use the Turnover or the cash recieved figure.

Once you start you have to stick to it.

I use the turnover figure regardless if I have been paid or not.

same here but i do cash recieved

[ianhannaford]

It doesnt matter to the tax man as long as you are consistant.

You can either use the Turnover or the cash recieved figure.

Once you start you have to stick to it.

I use the turnover figure regardless if I have been paid or not.

same here but i do cash recieved

Yep this is correct, you can choose whether you do Cash Accounting (money actually received) OR Invoice Accounting (money you have charged but may not have received)

Ian