Tax return and expenses trading 6 months

[Colin81]

Morning, I started trading 6 months ago as a sole trader using my personal account. I started from nothing and I am a handyman & gardening service. I have spent a lot of money and kept all receipts etc. I bought a van for £4k and 3 months later sold it for £2k so took a £2k loss then I have just got a personal loan for £8k to fund my new van. Fuel/tools/clothing etc all been a big expense. At the 6 months point do I just keep going as I am? I did start quickbooks but did it for 2 weeks and stopped as I do many short journeys and the vehicle tracking was driving me mad.

 

[GraemeL]

Hello @Colin81 .

Are you getting income from your work? I assume so. Also assume that your income is going into your personal account.

You can keep going like that, but there is a great danger of not knowing whether you are making or losing money or what your cash position is. More so if you are not using any accounting software. My way of working has always been to keep personal and business distinct, so I would recommend you open a bank account solely for business. When you have sufficient in that business account you can pay back your personal account.

 

[Colin81]

Hi thank you! Yes I use my personal account with Santander. Would it be easiest to open another personal account with them alongside it and use that for business in that case?

 

[WaveJumper]

I think you might find banks take a dim view of personal bank accounts being used for business and I would agree with the above much better to keep everything separate.

I would also suggest sitting down with an accountant before you tie yourself up in knots especially as you are already writing off expensive assets. I strongly recommend getting your house in order now

 

[DontAsk]

Hi thank you! Yes I use my personal account with Santander. Would it be easiest to open another personal account with them alongside it and use that for business in that case?

You don't open another personal account, you open a business account for a sole trader. That's exactly what I did when I first started.

If ever you go Ltd, you will need another account.

 

[MyTonyAcc]

Hi thank you! Yes I use my personal account with Santander. Would it be easiest to open another personal account with them alongside it and use that for business in that case?

TIDE offer a free sole trader bank account
I used them (for a ltd company account) set up was within minutes, and card arrived in a few days
quite happy with them so far

 

[MyAccountantOnline]

...At the 6 months point do I just keep going as I am? ,,,,

I wouldn't - you've been given some good advice above.

Lots of things to look at and consider.

You dont need to use QuickBooks vehicle tracking - use a system you find quick and easy.