Coding of reimbursed money in same payment as revenue

Question asked by Tina Pereira 2 weeks ago

I have a question about how to code (explain) reimbursement money that comes to me in the same transaction as payment for work (revenue). Currently, in my draft accounts to be submitted to HMRC, it is appearing as taxable income but this is not the case. The reimbursed money is not an expense and neither is it an expenditure. It is cost neutral because it is (already taxed) money that I have spent and am now recovering when i am paid. It is money that appears in every transaction, that is reimbursed by the person I have carried out the job for. How should I be coding it so it does not appear as taxable income? 

Write reply1

1 Reply

Hi Tina,

In this case, you should record the expense incurred normally, and treat the payment from customers as income. Any profit made on the re-charge amount will be taxed by increasing taxable profit, or any loss made on re-charge amount, will reduce taxable profit. If they net to zero, there is no effect on profit.

Tommy

Best answer
2 weeks ago

Reply to this question

Attach images by dragging and dropping or upload
 

Your comments will be public and can be answered by anyone in the Clear Books community.

Find out what we do and who we are

Apps

Company

Social