How to record credit into account

Discussion in 'General Business Forum' started by Rekkovitch, Jan 10, 2021.

  1. Rekkovitch

    Rekkovitch UKBF Contributor Free Member

    51 5
    Hi all

    Following on from a third party crashing into my van it has been written off and a settlement figure has been agreed and subsequently transferred into out business account.

    My question is how should this be accounted when it comes to the accounts ?

    Presumably its not classed as 'income' as such ? Its only 6k but naturally I don't want to be clobbered for tax IF I don't need to be ?

    Luckily we did qualify for the SEISS grants as our income last year was massively wiped out so I am keen for this not to look like we have made good profit in a month as its not really profit as its gone straight back out on a new van

    Thanks in advance
    Posted: Jan 10, 2021 By: Rekkovitch Member since: Nov 6, 2015
  2. StevensOnln1

    StevensOnln1 UKBF Big Shot Free Member

    3,421 745
    Have you spent the £6k on another van? If so, the purchase of the replacement van will offset the income when claimed under annual investment allowance (AIA) on your tax return, leaving your overall profit and loss unaffected.
    Posted: Jan 10, 2021 By: StevensOnln1 Member since: Dec 10, 2011
  3. Maxwell83

    Maxwell83 UKBF Regular Free Member

    733 198
    How was the original van treated in your accounts? 100% AIA?
    Posted: Jan 10, 2021 By: Maxwell83 Member since: Aug 4, 2012