Paying in CASH jobs to bank account

[parkesy_plumb]

hi guys im new to self employment and was wondering how you guys "declare" jobs you have done paid in cash.

Whats the process do you still invoice customer?

thanks guys

 

[Mike Jackson]

I write an invoice and stick the money in my wallet and use it to pay for diesel etc. If I get paid a huge chunk I'll use it to pay part of my account at the merchants.

You need to raise an invoice so that you've got a record of the transaction. HMRC are very suspicious of small traders that don't show any cash transactions and are likely to investigate. I normally get a few a week. Last large cash transaction was for a boiler swap and that went straight to the merchants, they can rung the risk of it in their safe rather than me having it in the draw at home.

 

[lame plumber]

Mrs will use it if it goes home!, got to pay for the boiler first!

 

[SimonG]

Fill the van with diesel, pay accounts or worst case paid into personal account and transferred into business account on line free.

 

[Roger Welton]

Personally, invoice as per normal, then pay into personal account then transfer over to business account to avoid shocking bank charges.

 

[parkesy_plumb]

hi thanks for the reply, just worried about tax man like shouldnt you put everything you earn into the bank?

 

[Thoggy]

As long as you have an invoice for the work done it doesn't matter what you do with the money it's yours, you have a invoice to prove it's declared earnings.

 

[JCplumb]

The tax man doesn't care what you do with it as long as you declare it in your tax return

 

[lame plumber]

it is a better accounting practice to run all your earning through your business account cash and cheques as then your accounts will match you banking statements and Mr taxman will be happier when he goes through your books. you dont have to, but when you have an inspection life is easier, also running business payments etc via your personal accounts is poor accounting practice as well and can tend to cloud the issue a bit. Accounting is simple, until you try and make it suit your particular needs, then it all goes wrong.

 

[diamondgas]

Watch out for your 'hole in the wall' withdraws It may seem strange that you've 'all of a sudden' stopped withdrawing IMHO

 

[tamz]

I have my business and personal accounts with the same branch of bank. It pysses them off when i pay say 2 grand into my personal account and then tell them to transfer it to my business one. It is not perfect but if they were less greedy i wouldn't need to do that.
It still costs me 30p or whatever but that is a bit better than the near 20 quid it would cost to pay in the cash.
If it is just small amounts pay it into a petty cash account (a biscuit tin or whatever you like) and use it for everyday running costs. Just make sure you keep a paper trail of everything.

 

[helpsy]

I run 2 current accounts at my bank 1 personal and the other for business( I'm not paying business account rates for a sole trader!). Pay cash into the work account(so there is a log of it) then transfer it to personal account.

 

[Best]

Try to always give the person you receive cash from a receipt for the amount & a copy for yourself. Surprisingly how easy it is for both parties to forget what amount was paid & when, especially if they pay in several & varying payments.

 

[gassafe]

I run 2 current accounts at my bank 1 personal and the other for business( I'm not paying business account rates for a sole trader!). Pay cash into the work account(so there is a log of it) then transfer it to personal account.

I did this once before, but my company has a "trading name" and I would have to ask for cheques to be made out to myself etc, it didn't look professional so I bit the bullet and got a business account. The charges ain't too bad, most pay by Bac's these days and it looks more professional.

most banks do free banking for 18 months too so that's good

 

[Reg Man]

As far as the HMRC goes, you don't even need a business account. Its the banks that push that one. As long as you have good accountancy records the HMRC are happy. Just completed my sons tax return tonight, will see how quickly it takes for all that CIS tax over payment to come home.

 

[hammers4spanner]

I always keep cash jobs hidden in a biscuit tin and when thats full under the matress being a plumber and obviously over loaded with cash i simply cant find a bank with a big enough vault for all my cash that i earn as a plumber

well thats what HMRC thinks about us plumbs

 

[tamz]

I just bought a new mattress as the old one had a lump in it :lol:

 

[Reg Man]

The way energy costs are going up, it may be more efficient to use the cash as fuel and put it on the wood burner LOL. Illegal suggestion of course just ignore me.

 

[tamz]

Like these guys

[video=youtube;i6q4n5TQnpA]http://www.youtube.com/watch?v=i6q4n5TQnpA[/video]

I think they maybe regretted it after the drugs wore off :smile:

 

[kirkgas]

I just bought a new mattress as the old one had a lump in it :lol:

Aye more likely you were burning your arse on the light bulb

 

[tamz]

Fairy lights in my bedroom Kirky :smile:

 

[gassafe]

Watch out for your 'hole in the wall' withdraws It may seem strange that you've 'all of a sudden' stopped withdrawing IMHO

I can't remem the last time I withdrew cash since being self employed :/ ......

 

[Nostrum]

Just keep a ledger for all cash. Simple piece of paper, reference all (some) cash payments to the amount and remember to deduct anything you pay in cash for otherwise your accountant will assume whatever you took in cash has been spent on drugs, alcohol and prostitutes.

think of it as a cash account and record like your bank would for all transactions that pass through it.

 

[gassafe]

All my cash goes on stamps if anyone asks...

 

[Reg Man]

I think this money burning should be encouraged. So I am willing to set up a system where anyone can send me their money, and I will burn it on your behalf. I guarantee this will be done sympathetically and no pets will be endangered in this process. So please send your guilty cash to: mud hut 3 Gwauna villas Lagos Nigeria Africa.

 

[PowerFlusher2]

hi thanks for the reply, just worried about tax man like shouldnt you put everything you earn into the bank?

You can put the money where you like mate, put it on the horses or buy lottery tickets. It is how you ACCOUNT for it through your books is what matters. You MUST record it as being RECEIVED into the business arising out of business activity and you MUST record it as GOING OUT of the business. What you spend it on allows Mr Taxman to decide if it was an operating cost to the business (reduces profit, reduces tax bill) or personal spending (taking profit, increases tax bill) - in general terms.

 

[kirkgas]

Fairy lights in my bedroom Kirky :smile:

There's just so much that could be said and not enough time to say it

 

[helpsy]

You'll have to beware of burning the future notes with a% of plastic in them...cough...cough!

 

[diamondgas]

I can't remem the last time I withdrew cash since being self employed :/ ......

Me too I record paying myself wages in cash to accomodate any question of why I no longer withdraw cash!

 

[Dotty]

Not comfortable with this in open forum......

 

[Killy Bing]

Not comfortable with this in open forum......

+1!!!!!

 

[helpsy]

HMRC have probably been monitoring sites like these since they became active.

 

[mfgs]

Right now its in private, people can be more honest about there cash transactions haha.

 

[tamz]

Personally i don't take cash and never have. I used to like payment in kind which as far as i know isn't taxable and if it is they were all pysh and not worth a button.
But these days my head is in a different place so i never know what i want :smile:

 

[helpsy]

Having recently got a card payment machine, I really only want to take card now.