wrx

Brief history

My wife works part time and has recently set up het own business (party planing and baloon decor) as what was a hobby started to bring in money so she registerd it with the inland revenue.

I have set up a business section in my bank account (credited with £1000 of my money) and set up a spreadsheet for all invoices in and out which link to accounts page to give a running idea of profit and loss and make it easier for an accountant (which I have no idea of good ones or bad ones but presume I will need to get one to do her tax return at the end or year)

Everything was going well (obviously spending alot more on setting up the business for equipment and training courses) until she recieved a cheque in the business name so she had to set up a business bank account. Off we went to Barclays (convenience factor) and was told that we would need to put all the spending on the business card as the law had changed and the IR would no longer accept goods bought on personal credit cards.

So the question is, is Barclay's correct and all the setting up I have put on my credit card and paid off using my money from the business section in my bank account lost? I only wanted to use the barclays business account for deposits then transfer into my personal bank account as I get 5.1% interest wheras the barclays business account gets next to nothing. I thought that I just needed to keep all the invoices (no mater how they were paid) and at the end of the year my wife would get charged on the profit shed made.

Any help appriceated Also anyone know how I can best learn about accounting?

David Lock

I am sure others will comment but AFAIK you can pay for business goods any way you like - card, cash or goats milk. The key thing is to have the evidence, typically a receipt, saying that you paid for them and what they were. What are you supposed to do if a supplier doesn't take cards?? Seems like there is a wire crossed somewhere and Barclays are Gold Star winners when it comes to crossing wires. Can't comment on the accounting but just ensure you have records or all income and expenditure, no matter how trivial, that you can show to accountant when you come to do the books. And you need to keep these records for at least 6 years so clean out the attic

BTW an old mate of mine left a big pay city job to help his wife with a balloon company which she started and I think they are now one of the biggest in the country

NotoriousREV

They're talking ball *****. For example, what about employees that buy stuff and claim it back on expenses? As Mr Lock says, evidence is the key.

The Snug Rhino

its crap...she's self employed so can spend on her biz how she wants. a single biz account is nice and simple but the revenue dont care as long as the expense is for business.

MikeCardiff

iTrader: (2)

Also, if she is a sole trader ( I assume she is ) then her business account and current account are basically the same thing - all the money is hers - it doesnt matter which account it is in.

The main reason for keeping a seperate business account is that it just makes accounting easier as you only have one lot of records to look at, and dont need to pick out which items were personal and which were for the business.

If she wants to use a credit card for business purchases, its simpler just to allocate one card solely for business use, as you know everything bought on that is for the business.

Scooby Soon!

I think I know what they are talking about, There is or will be a new VAT ruling which means VAT applicable products HAVE to be purchased with compnay credit cards. So if an employee used to buy the fuel for a company vehicle and then bring the receipt in and the company would pay back the money the new ruling would prevent this, but as far as I know it hasnt started yet and would only really be enforcable with big companys.