I have just started a self employed bookkeeping business. My question is that if i am the only person working for the business,in the Profit and Loss Account, will i include the drawings in the Direct Expenses or shall i deduct the drawings from the Net Profit?
Drawings should be in the balance sheet section and will show against capital introduced, so you would work out your profit and loss (hopefully profit) without drawings having any bearing at all. You would in affect if I remember rightly pay tax on your net profit regardless of drawings, then show drawings in the capital section of your balance sheet.
Drawings should be in the balance sheet section and will show against capital introduced, so you would work out your profit and loss (hopefully profit) without drawings having any bearing at all. You would in affect if I remember rightly pay tax on your net profit regardless of drawings, then show drawings in the capital section of your balance sheet.
That is correct, tax is due on profits.
I can see where attilabenko is coming from - if you are advising clients there is some basic knowledge you should have!
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