Tax return and deposits

[Minstrel]

Am I right in thinking that a deposit which is taken for the first months fees should be added to the month worked not month paid.

Wouldn't usually matter but this was a deposit paid in January for a little one starting in November so different tax years.

Thanks :)

[moggy]

I always put any money coming in as fees or deposit down in the month it comes to me.

Is that right?!

[Minstrel]

I thought I'd read that it goes in the month that it was earned, so for the most part it doesn't matter (ie 1st June for June's hours).


Now I'm confused....

[moggy]

I thought I'd read that it goes in the month that it was earned, so for the most part it doesn't matter (ie 1st June for June's hours).


Now I'm confused....

Sorry, yes you are right normal fees for June 1st all go down in June's income (even if received a day early, for example).
A deposit I receive in June for a place in Sept, for example, I put in June as that is when I received it. But I may be wrong.

[Chatterbox Childcare]

I would put it into my accounts to show that it was taken and then take it out again as a prepayment so the balance is nil and then I would put it into the new year as an accrual

[bunyip]

I always put any money coming in as fees or deposit down in the month it comes to me.

Is that right?!

Not strictly right, but IME HMRC tend not to be too concerned just so long as you're consistent. I also enter payments received on the date received, rather than on the period worked.

[hectors house]

When I worked for an agricultural buildings manufacturers, customers had to pay 25% deposit - they had a handwritten receipt send to them rather than one of our printed numbered invoices - the deposit went into the company bank deposit account and sat there until the job was complete (in case we needed to return it - problem our end, rather than the customer cancelling). When I sent the final invoice, the amount of the deposit would be deducted leaving a final balance and the money from the deposit account would come into the current account - the gross (full amount) of the invoice would be entered through the VAT accounts.

So I wouldn't put a deposit through until the contract started - in case you had to give it back.

[Zoomie]

I asked this a couple of years ago.

I think Mr A advised that you put the deposit as income in the month that you actually received it. Then at the end of the tax year, you reverse(minus) the income / deposit (so it effectively an in/out transaction), and then pay it in again at the beginning of the next tax year. This way, you can carry the deposit over a number of different years.

Hope I have explained it adequately.