Goods taken for own use

tro127 · 13 March 2018 at 12:48PM

We run a small limited company that manufacturers and sells children's clothing. We dress our children in the clothes both for photo's and general wear to advertise the items to other parents in the area. How do we account for this? The business benefits from our children wearing the clothes so it doesn't feel like its a straight forward 'Goods for own use' situation but obviously don't want to misreport our accounts. TIA

Pennywise · 13 March 2018 at 1:51PM

You should raise sales invoices and pay the company for at least the cost prices of the clothes you take out to use personally. You don't need to pay full retail price, but do need to pay at least what it costs the company.

The only ones you don't need to pay for are the ones that aren't worn in normal use, i.e. anything worn only for a photoshoot, as long as they're not personally worn afterwards.

tro127 · 13 March 2018 at 2:00PM

Thanks for your response. So just material costs or do we need to include time to make?

00ec25 · 13 March 2018 at 8:12PM

tro127 wrote: »

Thanks for your response. So just material costs or do we need to include time to make?

if the clothes were not taken by your children then they would be sold to a customer at cost + profit margin

the cost to the company of you taking them is therefore: materials + cost of labour in making them

how you cost your labour is down to how sophisticated your accounts are

tro127 · 14 March 2018 at 11:21AM

Thanks 00ec25

Goods taken for own use

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