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    • elenapopaphoto
    • By elenapopaphoto 15th Apr 19, 5:25 PM
    • 2Posts
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    elenapopaphoto
    Deposits and tax year
    • #1
    • 15th Apr 19, 5:25 PM
    Deposits and tax year 15th Apr 19 at 5:25 PM
    Hi,

    Not sure if this has a direct implication on cutting tax, I have a feeling it might.

    As a wedding photographer, I take non-refundable deposits from clients to reserve their date. The deposits are, more often than not, paid in the tax year ahead of the wedding day itself (which is when the balance is due and services are performed).

    I do my accounts on a cash basis. Am I wrong in declaring deposits as money earned during the tax year during which they were actually paid? Or should I declare them in the tax year during which I perform the service?

    Obviously if second option, then I'd be paying less tax this year...but I'd rather keep it simple and declare income as it comes in!

    Any thoughts massively appreciated!
Page 1
    • 00ec25
    • By 00ec25 15th Apr 19, 5:30 PM
    • 7,942 Posts
    • 7,655 Thanks
    00ec25
    • #2
    • 15th Apr 19, 5:30 PM
    • #2
    • 15th Apr 19, 5:30 PM
    cash basis means what it says, you are doing it correctly
    • elenapopaphoto
    • By elenapopaphoto 15th Apr 19, 5:47 PM
    • 2 Posts
    • 0 Thanks
    elenapopaphoto
    • #3
    • 15th Apr 19, 5:47 PM
    • #3
    • 15th Apr 19, 5:47 PM
    Thanks - that's what I thought, until someone's accountant told me you should be declaring deposits during the tax year the services were provided. Hence my confusion and panic mode!
    • Pennywise
    • By Pennywise 15th Apr 19, 6:07 PM
    • 11,376 Posts
    • 21,743 Thanks
    Pennywise
    • #4
    • 15th Apr 19, 6:07 PM
    • #4
    • 15th Apr 19, 6:07 PM
    Thanks - that's what I thought, until someone's accountant told me you should be declaring deposits during the tax year the services were provided. Hence my confusion and panic mode!
    Originally posted by elenapopaphoto
    That would be right if you hadn't adopted the cash basis.
    • unholyangel
    • By unholyangel 15th Apr 19, 6:22 PM
    • 13,394 Posts
    • 10,737 Thanks
    unholyangel
    • #5
    • 15th Apr 19, 6:22 PM
    • #5
    • 15th Apr 19, 6:22 PM
    Thanks - that's what I thought, until someone's accountant told me you should be declaring deposits during the tax year the services were provided. Hence my confusion and panic mode!
    Originally posted by elenapopaphoto
    Not all accountants were created equally
    Money doesn't solve poverty.....it creates it.
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