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We5ty
Level 2

Using Simple Accounting Rules in QBSE

Hi, I work from home in IT/PC Repairs and use cash basis and simple accounting rules for my self employed accounts.

 

I've just started with QBSE and was wondering how to record certain expenses where there are splits, but simple accounting rules apply for example:

 

Electricity, Rent etc. How do I record the transaction imported from my bank account, Business or Personal? And how do I ensure that the correct amount, calculated at the allowable flat rate is applied to business expenses correctly?

 

I assume for motor vehicle expenses that these are all marked as personal expenditure and the business use is calculated as per the mileage tracker?

 

Many thanks in advance.

 

Simon.

Solved
Best answer March 31, 2019

Accepted Solutions
MaryLurleenM
Moderator

Using Simple Accounting Rules in QBSE

You're right, We5ty.

 

We calculate your self-employment taxes based on your business income, spending, allowable expenses and the information you have set up in your Tax Profile.

 

As long as you tag your transactions correctly, the system will calculate it. We follow the simplified expenses if you're self-employed from HMRC: https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home. You can also check this: https://www.gov.uk/expenses-if-youre-self-employed.

 

Check out this article for more information: Three tax calculations to help you at tax time.

 

Let me know if you have additional questions.

View solution in original post

3 REPLIES 3
Rustler
Level 15

Using Simple Accounting Rules in QBSE


@We5ty wrote:

Electricity, Rent etc. How do I record the transaction imported from my bank account, Business or Personal? And how do I ensure that the correct amount, calculated at the allowable flat rate is applied to business expenses correctly?

 

This entry is all on you, you decide the amount of rent that is split between personal and business and make the entry. 

 

oops just noticed you are in the UK.

 

I assume for motor vehicle expenses that these are all marked as personal expenditure and the business use is calculated as per the mileage tracker?

 

Mileage at tax time is a choice.  You enter actual expenses or you use the  flat rate per mile.  regardless of which way you go, you still need a trip log as a permanent record to back it up.  As well as the starting and ending odometer reading for the year.

 

I suggest you dedicate a credit card to the business, it can be a personal one.  Use as needed but especially for auto expenses, and book that to the auto expense expense account.  At year end some simple math, and you can find the percent of business use of the car, then subtract that from 100 to get personal use.  Use that personal use percentage to move a percent of fuel,. and other auto expenses to personal.

 

Keep in mind, QBSE is not very functional or flexible

 

QBSE does not allow for any new accounts (categories) to be created
QBSE does not keep a customer listing
QBSE does not have a balance sheet so you can not enter the cost or the depreciation for a car/equipment
QBSE does not do inventory or cost of goods sold
QBSE can not do payroll
QBSE does not do any associated IRS forms, like home office deductions or depreciation
QBSE will not accept a banking file formatted as .qbo (a standard intuit type of file)

 

 


 

We5ty
Level 2

Using Simple Accounting Rules in QBSE

Thanks for taking the time to reply, but yep HMRC not IRS ;-)

 

So far, I've marked Rent/Rates/Utilities etc as business and looking at the TAX calculation it has made some sort of split calculation as it states Allowable and Disallowable Expenses (figures in both cloumns). But how it's calculating it I'm not certain, I have stated hours worked at home per month in the Tax Profile, so maybe that's where it's getting it from.

 

I would hope QBSE is compatible with UK tax simplified rules as I'm supposed to be able to submit my return directly to HMRC!

MaryLurleenM
Moderator

Using Simple Accounting Rules in QBSE

You're right, We5ty.

 

We calculate your self-employment taxes based on your business income, spending, allowable expenses and the information you have set up in your Tax Profile.

 

As long as you tag your transactions correctly, the system will calculate it. We follow the simplified expenses if you're self-employed from HMRC: https://www.gov.uk/simpler-income-tax-simplified-expenses/working-from-home. You can also check this: https://www.gov.uk/expenses-if-youre-self-employed.

 

Check out this article for more information: Three tax calculations to help you at tax time.

 

Let me know if you have additional questions.

View solution in original post