self employed cash?

sprucegs

How do I declare cash if I'm self employed? I have done a job for someone who didn't want an invoice and said he just wants to pay cash....
How do.i declare this cash? I want to put it in my account and obviously declare it on my tax return but with him not wanting an invoice what should.i do?
Thanksm

Dazed_and_confused

How about,
Accept cash payment for work done
Pay money into the account
Prepare invoice as normal
Throw clients copy in the bin
Declare income on tax return

phill99

As above. I often get given cash but the customer doesn't want a receipt. I simply raise an invoice as normal, print off a copy for my files, put the cash into the bank. The bank statement then shows an amount of cash going into the bank which tallies with the invoice.


My accountant is perfectly happy with this and the HMRC haven't questioned it in the 14 years I have been in business.

sprucegs

Thankyou.

Does it matter when the money is out into the bank? Obviously befor the end of the tax year, but can I do a few jobs then put the money in all at once?

Also is there anything against doing work for close family? Parents, siblings etc?

bugslet

You can out money in the bank, or not, or some of it. As long as you account for it.

You can do work for family, why not from an accounting log.

I think you are over thinking this.

phill99

sprucegs wrote: »

Thankyou.

Does it matter when the money is out into the bank? Obviously befor the end of the tax year, but can I do a few jobs then put the money in all at once?

Also is there anything against doing work for close family? Parents, siblings etc?

You can work for who you want.


You don't need to actually put any money in the bank. You just need to do what is classed as 'cash accounting'. However, I have been in business for 14 years and still don't understand cash accounting so still find it easier to put it in the bank as I receive it!!

trailingspouse

Putting it straight into your business bank account (I assume you have a business bank account that is separate from your personal account?) keeps things simple - it avoids the 'back pocket' syndrome, where money goes into the back pocket and gets spent without ever hitting the books, and it also gives you the opportunity to put 1/3 of it to one side for future tax liabilities.

And just because your client doesn't want an invoice or a receipt, that doesn't mean you don't give them one. If they want to throw it in the bin that's up to them. Invoices and receipts allow you to keep track of who owes you money and who has paid - a fundamental part of running your business. Do it right - and don't allow your customers to dictate how you run your business.

sprucegs

Thankyou. I dont currently have another account for my self employment however this is something I will be doing very soon. It will be easier with a separate account. I don't earn a lot, I'm young and fortunately don't have many overheads but I'm hoping to slowly build things up and gain more customers when I can.