Do reinbursed expenses count as income?

[Ardesco]

Yes I did register as self employed.

But remember I don't have a business. So everything I get paid is my personal income.

If you are self employed you have a business. If you don't think you have a business you need to read up on being self employed. You still need to keep records of your business income and expenditure, and show how much money you are taking out of the business as your income.

Yes but the guy on the advisory line said that, because the expenses were included in the total on the invoice, then I need to add them to the tax form as expenses.

I think this makes sense. Otherwise the total of one's invoices isn't going to add up to the income plus expenses specified on one's tax return. It would look like I was under reporting my income if someone were to go and add up the 'money in' on my bank statements.

You are confusing your money with your businesses money. You need to separate the two or you will get in trouble further down the line.

Treat all money paid by the client as business income. Treat your expenses as business expenditure. Whatever is left over is profit and you can take that as your personal income. You then need to pay tax on this.

You really need to talk to an accountant!

[IanIan]

If you are self employed you have a business.

Sorry I meant to say I don't have an Ltd. But I have been careless in failing to distinguish between my personal income and the business's income. But given that I'm a sole trader and the business is called the same as me and all of the business's profits are in my personal bank account then there's not much difference.

And it sounded like you were talking about dividends when you wrote...

show how much money you are taking out of the business as your income

You are confusing your money with your businesses money. You need to separate the two or you will get in trouble further down the line.

Yes, by income, I mean what I'm paid minus expenses. When I referred to income on bank statements, I should have said the business's gross income.

Treat all money paid by the client as business income. Treat your expenses as business expenditure. Whatever is left over is profit and you can take that as your personal income. You then need to pay tax on this.

That's exactly what I'm doing.

The question is just whether to put the expenses on the form given that they were reimbursed. I think yes and so does the help line.

I was trying to reply to your statement...

If the expenses were incurred exclusively for business reasons you shouldn't have to declare that income on your tax form.

[dmini]

Even like this - you need to split your "business " earnings away from your personal money - at least into a separate account in your name.
Otherwise how do you keep track of what you owe HMRC - as a bare minimum - and be able to prove it!
To echo other peoples comments YOU NEED TO TALK TO AN ACCOUNTANT.

[IanIan]

Otherwise how do you keep track of what you owe HMRC - as a bare minimum - and be able to prove it!

Quite simple really... you add up the invoices.

[basshead]

Quite simple really... you add up the invoices.

How do you then separate the interest you receive on the account into that accrued on the business versus personal balances?

[IanIan]

How do you then separate the interest you receive on the account into that accrued on the business versus personal balances?

I suppose you can't. But its not a legal requirement to have a seperate business account if you're a sole trader...

http://www.hmrc.gov.uk/pdfs/sabk4.htm#h15

...so I presume the powers that be aren't bothered.

[Ardesco]

More likely they will use it as a stick to beat you with during an aspect investigation.

It may not be a legal requirement, but it makes good business sense. It stops you getting your money and your companies money mixed up. Bear in mind you have to also document everything and show the proportion of interest that is yours and the proportion of interest that belongs to the company.

If anything you are making it harder for yourself by shoving everything through your account.

[IanIan]

Yes I think you're right.

I suppose that given the limited number of invoices and expenses I've had to deal with, it never really occurred to me to create a seperate account.