You are saying that you are a sole trader and that the wages are paid to you, the proprietor.
That being the case, the amounts being paid to you should be shown as drawings in the Capital Account and are NOT a deductible expense for tax purposes.
-- Edited by Truemanbrown on Monday 4th of March 2013 10:26:09 AM
In need of some help if at all possible. I run Sage for bookkeeping but the business is not a limited company, the P&L at year end shows a loss due to expenses and then GROSS WAGES.
I need to alter the Gross wages by the amount of loss so the gross wages comes down by the amount of the loss, here are some figures for numbers sake -
Gross Profit - £50,000
Gross Wages £35,000 (only proprietor, no employees)
Other Expenses £19,000
Net Profit/Loss (£4,000)
I need to take this £4,000 loss off the wages so that the Gross wages show £31,0000 and as a result match the self assesment return.
Hope this makes sense and you can help with a journal (have tried CR Wages / DR P&L account and it carries forward the loss as a profit to next years accounts).
Sorry either I am not being clear here or there is a misunderstanding.
I am NOT counting wages as a tax deductable expense, the exact opposite, I am putting them through as Wages then the wage amount (in the P&L) Plus or Minus whatever the year end Profit(loss) amount is then equals amount taxable.
Calculation I gave shows this as £35000 - £4000 = £31000
I am sure that the last post does not read as it was intended but please could you rephrase to offer the proper respect to an accountant who was only trying to help you.
As it stands the first paragraph comes accross quite condescending.
regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
You should not put drawings through as a Profit and Loss Account item. It should go through as a drawing in the capital account which forms part of the Balance Sheet.
What I would do is set up the following accounts in the 3000 range:-
3001 - Capital Account Bfwd 3002 - Capital Introduced (this is where you put money into the business). 3003 - Drawings (where you draw money from the business).
Then go in to the chart of accounts set up - NOMINAL, then COA to change the headings in the balance sheet. I would change the heading for Capital and Reserves to Capital Account.
It's worth getting to grips with the COA option. You can change and add headings to customise your P&L and Balance Sheet.
