Explaining a cash income - and some praise!!

elljay

Sorry not sure how to entitle this question! Am still looking at all options and trying to work out the best way forward. One issue is that I am paid in cash for some of my work, this can be a bit of babysitting here, a bit of cleaning there, an odd bit of extra work done for one of my regular employers, bit of gardening/driving etc. I don't generally pay this money into my account but use it for petrol and food to avoid using my bank account so that is freed up for regular payments, direct debits, rent etc. My normal salaried work gets paid in as usual.

I am registered self employed and have no intention of hiding this cash income, but I'm wondering if I should pay it into my bank account and then pay for everything through that, so at least there's a trail of what's in and what's out. It's very variable each month but can be as much as 150 - 200. But sometimes significantly less. At the moment looking at my bank statement there's virtually nothing for food or petrol showing.

I really like having cash rather than cards as I feel much more in control of spending, only taking exactly what I need out with me etc. However if I'm to have to go for an IVA or BR in the next few months, I want to be prepared for scrutiny.

On another tack, and this is praise, I have several credit cards who have accepted a token payment of £1 since before Christmas. I was expecting a call any day to put an end to these arrangements. Sure enough, was rung last night. After a bit of a chat and a run through my budget, the lovely man even asked me if I was ok managing the £1? I said of course so he said he would mark it for review in a year!!!

Small examples of faith don't half lift you, don't they!!

egrescrimp

The money doesn't need togo through your bank account, just keep records and receipts and then when giving your income you've got proof

elljay

Thank you - pretty obvious really, I should have thought of that. I can't prove the income but will keep every receipt for every outgoing now. Thanks

Wood for trees sometimes isn't it!!

somethingcorporate

Are you declaring and paying tax on it?

elljay

somethingcorporate wrote: »

Are you declaring and paying tax on it?

Yes, every penny. I have a business as well as other self employment (all paid through the bank account) as well as paye work so do a self assessment every year - have done for years. However, there's no way of showing this cash on the self assessment as separate to other self employed payments. Were you thinking that maybe I could use my self assessment forms as evidence perhaps? It's an idea but it doesn't show separately so all gets a bit merged in. Also as it's intermittent and not regular, it's confusing too. At least if I was selling through ebay or something as others do for a bit extra, there would be evidence. Another alternative would be to ask for payment into my account or a cheque, but really, for a bit of babysitting, people don't want to do that.

However, the receipts for food etc will be good, I normally throw them out when I've entered them onto my spending spreadsheet but will now keep them.

thanks