Just started doing the year end accounts for a building contractor and have come to the allocation of skip hire,in the past with other businesses I have expensed it into the Hire of Equipment account as there was only a few skips hired throughout the year, now with this business the hire of skips comes to quite a substantial amount of money over the course of the year and I am now thinking that maybe it should go down as Cost of Sales.
Just wondered what other peoples thoughts are on this
Cheers
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
I dump such skips hire to indirects, although I must admit I don't tend to lump it with tool hire, but classify it under refuse or some such. That said for mine (£1m + kitchen companies) the cost in the scheme of things is perhaps not as great as yours, but also the nature of the 'construction' company in my case wouldn't warrant it.
So as a bit of Sunday fun day (!)) question back for you and others - if you had a say a house building construction company building houses on a brownfield site which involved land clearance first, where would you park the land clearance (and therefore the skips required).
Can you give us a wee bit more on the type of construction company.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I dump such skips hire to indirects, although I must admit I don't tend to lump it with tool hire, but classify it under refuse or some such. That said for mine (£1m + kitchen companies) the cost in the scheme of things is perhaps not as great as yours, but also the nature of the 'construction' company in my case wouldn't warrant it.
So as a bit of Sunday fun day (!)) question back for you and others - if you had a say a house building construction company building houses on a brownfield site which involved land clearance first, where would you park the land clearance (and therefore the skips required).
Can you give us a wee bit more on the type of construction company.
Hi Joanne
Thanks for link I will have a look now, only a sole trader who gets subbies in whenever they are needed, his main work is ground work on new builds and extensions to private properties so does go through quite a few skips during the course of the year.
As for Sunday fun day, first of all I would never go near a brownfield site but if I was unfortunate enough to win the contract to build new houses on the site I would have to take the cowards way out of answering your question and sub-contract the clearance out to a suitable company.
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
when you come across technical debates between Bill (Wella) and myself on here they're threads that give Aweb a run for their money as both of us come from a mindset of knowing that the devil is always buried in the detail of tax legislations and accounting standards. He's one of those on the site who really brought out the best of me whilst I was still going through qualificiation as he pushed my understanding to it's boundaries.
all the best,
Shaun.
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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.
