Working Tax Credits

[wakey]

My working Tax credits go into the same account as my business income and hence are available for me to use as business capital if I need to (Or get withdrawn to use for personal expenses)

Should they be shown in my business accounts (ie as something like a Directors Loan) or just be ignored?

 

[Zeno]

They are nothing to do with your business and should be ignored. I would recommend that you have them paid into your personal account instead as this could easily cause confusion.

 

[los_design]

My working Tax credits go into the same account as my business income and hence are available for me to use as business capital if I need to (Or get withdrawn to use for personal expenses)

Should they be shown in my business accounts (ie as something like a Directors Loan) or just be ignored?

I take you are a sole trader then?

 

[wakey]

I take you are a sole trader then?

Yes I am a sole trader

 

[Marky65]

If these receipts into the business bank account are completely ignored won't there be a difference when you come to do a bank reconciliation. Maybe they should be shown as a receipt into the capital introduced, so dr bank cr capital introduced.
Regards
Mark

 

[los_design]

Yes I am a sole trader

So, what you are saying is that your payments are going into your personal account that also receives payments for your business/products/services.

In which case...ignore them as they bear no relevance to your companies accounts.

The only time they will come into play is at the end of the tax year when you declare your profit/loss that will affect your WTC award (or when you notify them of changes etc)

 

[Jenni384]

Can I just clarify that if the OP is a sole trader then words like "company" and "directors loans" are incorrect and misleading. There is no company (limited company) and no directors, there is a sole trade business with a proprietor. It's an important distinction.

As Marky 65 says, it's Dr bank and Cr Capital introduced in the books, as you want the bank to reconcile.

 

[Babylon]

If these receipts into the business bank account are completely ignored won't there be a difference when you come to do a bank reconciliation. Maybe they should be shown as a receipt into the capital introduced, so dr bank cr capital introduced.
Regards
Mark

I am puzzled here. Why it has anything to do with business capital?

For convenience, the OP is using the same bank account for business as well as personal purposes. Even though it is not a smart thing to do, the working tax credit has nothing to do with the business and should be excluded from business transactions. The bank reconciliations done by the bookkeeper/accountant should also exclude these tax credit receipts from the bank balance.

 

[wakey]

Can I just clarify that if the OP is a sole trader then words like "company" and "directors loans" are incorrect and misleading. There is no company (limited company) and no directors, there is a sole trade business with a proprietor. It's an important distinction.

As Marky 65 says, it's Dr bank and Cr Capital introduced in the books, as you want the bank to reconcile.

Ok so in Solar it would be a payment that Deposits into Account "Money to Be Banked" and paid From "Owners Capital". Is that right?

Or Will it just be much easier to ignore it. As some people say its only the reconciling that it becomes an issue for and its easy enough to keep a running total of the WTC and adjust the Bank statement figures to make sure the end figures match

 

[los_design]

I am puzzled here. Why it has anything to do with business capital?

For convenience, the OP is using the same bank account for business as well as personal purposes. Even though it is not a smart thing to do, the working tax credit has nothing to do with the business and should be excluded from business transactions. The bank reconciliations done by the bookkeeper/accountant should also exclude these tax credit receipts from the bank balance.

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