Drawings or savings accounts for sole trader

[Tina1]

Hello

I just wanted to clarify. If i put money for tax man into a savings acc each month and also money towards tax deductable courses and this savings account is also used for personal transactions would i need to do anything with the interest or reconcile it.
I was assuming not as when i pay the tax it has no bearing on the business acc and when i pay for the course i transfer it back into the business and then pay. So effectivley just holding teh money there until needed. Does this sound ok?
Or should i put the tax into drawings acc and pay at the end of the year from the drawings acc and also put the course money into drawings and again transfer back out to business when needed to pay for course?

Any guidance would be much appreciated. Thank you

 

[Williams lester]

Tax is not a business expense. So should be classed as drawings, there is no need to transfer it back to a business account.

 

[Davem1234]

I agree with the previous poster and should add that as long as you keep the receipts/invoices for the course fees then it doesn't matter where they are paid from.

Having said that if you transfer the money back into the business account and then pay the course fees it keeps all the business payments in the same place which I think is neater.

Dave

 

[Tina1]

thank you for your advise. If i do use this acc to hold the tax and course money would i need to reconcile it. I dont think i would though as it is just holding the money?

 

[Davem1234]

If you're just transfering money back any forth from the business account then don't bother doing any reconciliations.

Lets keep life simple!!