money in / money out

[auntym]

When i had been self employed for a couple of years i rang hmrc, i asked them that as some parents pay me in cash, some parents do direct debit...i was worried that as i recieved half my money in cash and i didnt put it in the bank, cause i use the cash money for my family living eg, shopping, if we go cinema, paying for mindees to go out - stocking up on bread milk etc, that i would get into trouble.
But hmrc told me that if i get paid in cash as long as i record the payment in my monthly / weekly accounts that it didnt matter if it went in the bank...basically i can go fritter it away on clothes or whatever i liked as long as i recorded the payment, then obviously in the same book note expenses out and any recepts that i need. and if under£10 dont worry.
But now iv read that you should put all money in bank to record it in, and all money out that u draw out should be accounted for? is this right?
like i say i record ALL monies including cash in my accounts as payments, but i dont put the cash money in the bank i use it for me, food, kids and my kids etc...does anyone else do this

[jane5]

As far as I am aware it doesn't matter what you do with the money as long as it is recorded as income for when you do your tax returns.

I am not totally clued up on this and I'm sure Debbie will be along later to advise you, but you may be getting mixed up about sole traders or ltd companies.

If you are a sole trader which I presume you are the money is yours to do as you please as long all income and expences are recorded for the tax man whereas if you have a ltd company and other people are involved you will have to account for all money ie your wages plus cinema money because it is not all yours.

This is probably not totally correct because I am just getting my head around things but its that kind of thing
I hope this helps a little:thumbsup:

[singlewiththree]

I don't bank it either. All my parents but 1 pay by cash at the moment. I give them an invoice, a receipt and then record it in my spreadsheet so figured that would be ok.

[Chatterbox Childcare]

As long as you record it all in your income it doesn't matter if it is banked or not. Just make sure there is a paper trail - invoice, receipt etc...

[auntym]

As long as you record it all in your income it doesn't matter if it is banked or not. Just make sure there is a paper trail - invoice, receipt etc...


i dont issue invoices, and they said they didnt want receipts so maybe i should just type up a annual invoice for last year and year before and hand it to parents and pop a copy in books? will show the monthy/weekly payments on it? up to now ive just recorded it...i will issue receipts in future but im sure they will be binned but at least i have a carbon copy here thanks debbie