Cash question please

[cathtee]

While talking to a cm friend of mine yesterday I mentioned that it was payday for the only cash paying parent, and she said oh yes
I have one pays cash and i put this straight into my purse. I said that it has to go into the bank and then take it out so that tax man
can see that you have recieved it, she got worried that as she doesn't do this how can it be shown other than in her accounts book.

Am I right in thinking that all money including cash has to go into the bank to prove how much we receive or can we put it into our purse
and just show it on paper, it would be so much easier to do it that way fed up of going to the bank every week to put in such a small
amount each week as all other money goes direct into the bank.

Hoping someone can help or if Mr Anchovey is about perhaps he could. TIA

[Mrsh3103]

I don't normally take cash to the bank. My accountant has never said anything about it! I just give him copies of all the invoices I send out along with the spreadsheet I fill in with my income :)

[cathtee]

I don't normally take cash to the bank. My accountant has never said anything about it! I just give him copies of all the invoices I send out along with the spreadsheet I fill in with my income :)

Thanks, I might start doing that, it's not very much so its a pain and if an accountant has not said about it then it must be ok. I do
my tax return on line so have never sort out advice.

[tulip0803]

When I used to live in town I used to pay all money in and then withdraw what I needed. I now live 14 miles from the nearest bank and it isn't practical to pay cash is every week - It is 7 miles to the nearest cash machine that doesn't charge - I refuse to use the ones that charge on principle (I have to drive to that one too, although it is closer).

I log everything in my accounts and that is fine. As long as it is in the accounts and not cash in hand. The problem is that my bank does not see my true income unless I pay everything in IYSWIM.

[Tealady]

Any cash I have goes straight to my.purse too. I will have invoiced and I issue a receipt too.

[Kiddleywinks]

No you don't have to physically bank it, but you do have to have record it in your accounts book as income which confirms you received it.

[cathtee]

Thank you all for the replys this has answered my question and will tell P that it's ok I think I worried her a bit by saying it has to be banked, glad to be proved
wrong :D

[Kerry30]

I never used to pay cash into my bank but it became a problem when i wanted to get my ex of the mortagage. The bank wanted to see on my bank statements money going in. This particulor amount was just over £250 a month. Now i pay cash it in even if it takes me a week to go to bank.

[The Juggler]

Thank you all for the replys this has answered my question and will tell P that it's ok I think I worried her a bit by saying it has to be banked, glad to be proved
wrong :D

i think that it all depends on what she means by putting it in her purse! as long as she's recording it ;)

[cathtee]

i think that it all depends on what she means by putting it in her purse! as long as she's recording it ;)

Yes She records it just not banked it.

I've always banked mine and assumed that I had to as it shows on statement and the tax man can see it if he checks my accounts

[Kiddleywinks]

This is one reason why HMRC don't like self employed accounts
It's quite easy for a lot of trades to not bank cash, but also not declare having received it in the first place, and therefore avoid being taxed on it.
Banking cash helps the paper trail should there be an investigation.
It is less easy for CM's to 'hide' our income, as we are already monitored by way of ratios/attendance records/legalities etc for the large part, and the sums we deal with are much smaller in comparison to many others.
So long as there is a record of payments, I wouldn't worry too much.
You can always use an accountant to verify your accounts, or surely you could use your tax returns to verify your income for a bank/building society mortgage? If it's good enough for the tax man it should be good enough for the mortgage company lol