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Post Info TOPIC: How should I record rates from personal account?
Alpine man


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How should I record rates from personal account?
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I have talked about rates before and was advised that say £3 pounds a week could be more accurate for electricity ,for very small at present, plant nursery business. This would be about right and its unlikely the tax man will ask further.

My question how ever is one of book recording. I am new to business and new to bookkeeping. I use a bank balance system and take out anything for personal use as personal drawings(using this column to record). I how ever wanted to keep rates, electricity and water in my case, as still paid from my personal bank account and not by my business account. In my case my business account  is just another personal account.

So my plan is this. Pay as normal from the personal account for the rates and then set up a standing order of £12 per month for electricity and similarly for water at £8.00 paying it back from my business account back to my personal account. That way my books would balance as  I would write the standing order up as a rate paid for electricity ,for instance, in my cash book. This seems the best way to me and only one quarter of my rates bills are then taken away from my business account.

What do you guys think?

Thanks again David.

-- Edited by Alpine man on Thursday 11th of March 2010 01:30:11 PM

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RobH


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I would say that was perfectly reasonable David. So long as there is an easily followed audit trail then hmrc will have confidence in the bookkeeping.

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Rob
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Alpine man


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Also with cash is it feasible to add up a few months of receipts(make sure all are kept) and pay a check back to yourself in the same way from the business to the personal account. This assumes cash is generally something taken from ones personal account when spent. Again this makes the business bank balance as responsible for all the transactions with out having to use petty cash. I am not sure of the answer here so thought i'd ask? thanks.

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Shamus


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Yes. Do that myself with minor expenses but try to keep them all within the correct quarter.

A good example would be mileage. It might be two or more months journeys before I transfer the mileage allowance from the company to my own bank account.

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.
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