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Post Info TOPIC: posting NI and tax payments in accounts
Kate1


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posting NI and tax payments in accounts
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Hi,

Hoping someone can help clarify for me - I prepare the accounts (profit/loss and balance sheet) for a self employed soletrader.  Am I to put through payments into the business accounts that the owner has made for National Insurance and tax payments?  Or are these payments to go through as drawings (personal)?

I'm sure that these are NOT allowable expenses for the self assessment purposes, that's why I'm second guessing myself as to whether to put through the accounts...

Many thanks,

 



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Robert Pearce


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If these are payments for the sole trader's self assessment and Class 2 or Class 4 National Insurance, then they should be treated as drawings. 



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Pearce & Co - Chartered Accountant and Chartered Tax Adviser 

www.pearceandcoaccountants.co.uk

These comments are outline only and are not a substitute for specific professional advice.
Kate1


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thanks for that, can I also clarify - the owner has an invoice from an agent for completing their self assessment (they are a sole trader), is this a business expense or is it drawings?

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Robert Pearce


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HM Revenue & Customs view is here.  Assuming that the vast majority of the work on the owner's tax return was the calculation of the tax liability for the sole trader business, then the fee should be allowable as a business expense. 



__________________

Pearce & Co - Chartered Accountant and Chartered Tax Adviser 

www.pearceandcoaccountants.co.uk

These comments are outline only and are not a substitute for specific professional advice.
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