Postage - Do I class it as income?

[tiredndizzy]

Sorry in advance if this is a stupid newbie question?

I am to trying create a spreadsheet for my accounts but I am unsure where or how to include postage costs? are postage charges classed as income/turnover?

 

[Faevilangel]

If you're accruing postal costs then it's an expense.

Sent from my HTC Desire using UK Business Forums

 

[TotallySport]

if your taking money as part of a sale for postage, then its classed as part of your turn over.

but it also part of your cost of sales as an expensive when your bill comes through.

 

[tiredndizzy]

I am a sole trader using the cash accounting method.

Originally I included as part of my income as I charge more than the cost price for postage, but really what what is left over only covers the packinging etc.

However I am trying to stay below the VAT threshold. Is there a way to charge it so is not counted as turnover?

 

[TotallySport]

your turn over is your turnover, regardless of profit, no way to cover it up.

 

[TotallySport]

your turn over is your turnover, regardless of profit, no way to cover it up.

sorry the only way to keep under the VAT threshold is to stop taking in money, people are known to go on holiday for 3 months of the year so their business stays under the threshold.

Being VAT register does have good sides as well, it means your business is growing, and although a pain to work round if you want your business to grow you have to go VAT registered at some point.

Although if you are starting to be taking that sort of money, there could be advantages to become a limited company, providing your paying yourself something.

 

[Wellesley Wealth]

I wouldn't recommend using any tricky methods to stay under the threshold, or trying to cover things up. Your better of being upfront and doing all of your accounts honestly, otherwise you may suddenly find yourself with a very large bill when the tax man catches up with you!!

 

[tiredndizzy]

I wouldn't recommend using any tricky methods to stay under the threshold, or trying to cover things up. Your better of being upfront and doing all of your accounts honestly, otherwise you may suddenly find yourself with a very large bill when the tax man catches up with you!!

I Agree. I am not trying to find away to get around it.
Actually, I am still setting up my business which is why I want to ensure I am doing everything correctly. Going the VAT route is still an option but one I had not planned on.

I just wanted to check that I hadn't missed something regarding postage.

 

[TotallySport]

if your not trading yet, I wouldn't worry to much about VAT unless your prices are big, certainly don't register untill you hit the threshold

 

[brownkane]

The VAT threshold in the UK is £77,000 so you do not need to worry about registering until you are nearing this turnover. This is unless you find it beneficial to your business. The amount of postage that you charge your customers will be part of your turnover, whereas the postage and packaging that you actually pay will be an expense.