I've been looking for a while but have no idea under what category I should file my Paypal fees ?
I receive £90 and then have a separate charge of £3.26 as the fee. It automatically categorizes this under Professional fees, is this correct?
For Paypal fees you can create a new chart of account for Paypal fees.
To do this go to accounting> chart of accounts> new> expenses> detail type you can use the one you mentioned or bank charges (as this is for fees you pay to financial institutions)>name-name it Paypal fees>save
That way you can when when you run a report on expenses see what you are spending on Paypal fees
Any questions on this just reply back to this post.
Hey Emily, I unfortunately don't have that option in Quickbooks self employed. Is there another way I can do that or some other way I can categorise the fees correctly? Currently they're under professional fees, does that work?
Also I have the same kind of question in regards to Paypal but with payments from other currencies. Currently I have it showing up like this:
Payment from Customer : + 1000 CAD
Conversion fee - Currency Conversion (debit) - To British Pound :-CA$955.70
Currency Conversion (credit) - From Canadian Dollar - +£552.04
How do I go about categorizing this correctly? I have currently got the +552.04 as credit to my account as that is the actual money that went in, but I somehow need to minus the fees I've been charged. Do I need to do this manually?
You should be categorising Paypal fees under Other financial Charges, we have enclosed a link.
You will also have to record multi-currency payments manually in GBP.
I run an online Store via ebay and have been advised by my accountant that if I do it the way you have suggested there is a £500 limit on Bank and Finance charges.
My Paypal fees and I suppose many others using the SE Quickbooks will have over £500 fees and they will be wrongly recorded in Qucikbooks as when they go over the £500 limit anything above that will be a disallowable expense.
Paypal isnt a bank as such in the UK and all PayPal fees should be allowed as an expense in your accounts. They are transaction/Merchant fees based on individual transactions
Surely this is bad advice you are giving ?
PayPal is connected like a bank account, and its transactions are treated the same way. However, you can change the category of the PayPal fees that reached £ 500 or more. You can consult an accountant or phone HMRC about it.
At Intuit, we'll be happy to assist you with How do I's, but for questions regarding specific categories, it's best to consult an accountant or your tax agency.
If you have more questions, you can always go back to this thread.