My client is a soletrader who has loaned someone some money from the business account. Am I right in setting this up as a loan account and it appears as a liability, and therefore not as an expense in their P&L?
Incidently the money was paid back the following year (11/12) but this is for their 10/11 tax return. There is no interest payments on the loan of the money so no income earned from the loan.
My client is a soletrader who has loaned someone some money from the business account. Am I right in setting this up as a loan account and it appears as a liability, and therefore not as an expense in their P&L?
Incidently the money was paid back the following year (11/12) but this is for their 10/11 tax return. There is no interest payments on the loan of the money so no income earned from the loan.
Thanks!
If your client has loaned someone some money from the business account then it would be an asset not a liability, either current or long term dependant on the terms of the loan, I would of thought.
As an afterthought, can they lend me some interest free money?
-- Edited by Rhianrach on Saturday 14th of January 2012 12:08:02 PM
Grrrr! Sorry! I meant Asset! This is what happens when you work into the evening whilst moving house! I wish I'd never said yes to this - the whole thing is a complicated mess! And they've left it til a week before their accountant wants it for their tax return to do anything about it!
Thank you for responding! They won't have any money to loan by the time they get my invoice for this little lot!!
Grrrr! Sorry! I meant Asset! This is what happens when you work into the evening whilst moving house! I wish I'd never said yes to this - the whole thing is a complicated mess! And they've left it til a week before their accountant wants it for their tax return to do anything about it!
Thank you for responding! They won't have any money to loan by the time they get my invoice for this little lot!!
So can they do me an interest free loan or not? Or is that dependant on your fees?
-- Edited by Rhianrach on Sunday 15th of January 2012 01:01:35 AM
