Help with taxble profit

Hi Neal,

Regarding your estimated tax bill and capital expenditure, you can view my previous answers here. To reiterate, Quarterly submissions under Making Tax Digital for Income Tax report your day-to-day allowable business income and expenditure. Capital purchases such as plant, machinery, and vehicles are generally classified as capital assets rather than standard day-to-day expenses, and tax relief for capital expenditure (such as capital allowances) or accounting adjustments are finalised as part of the year-end process rather than through in-quarter expense figures.

You can record depreciation using a journal via Tools > Journals, it will be disallowed on quarterly updates. If you are using cash basis for quarterly updates, you can just record machinery and vans as a normal expense deducted straight from income. If you are using accruals basis, then you must claim capital allowances at the year end. Cars have to be done via capital allowances or the flat mileage rate.

For bank charges, these can be categorised to the default administrative expense code Bank charges. When explaining your bank transactions or creating expense entries, select the Bank charges account code to ensure they are reported within your allowable business expenses.

For the year end, you will have to submit this digitally via the MTD tax return. You can open this by hovering over your business name at the top right > Add MTD Tax return. For tax payment schedules, please consult a qualified accountant or visit the official GOV.UK website.

Tommy

Thank you Tommy