Question about vat

davidbcr

Hi,
In April of this year I started a business as a sole trader, and it is now approaching September, and I have not made any profit, I knew this would be
the case for the first couple of months.

Because my overheads are low and with the help of my girfriend and sister I have managed to keep the business afloat, e.g. rent, electricity, supplies.

My first question is, when the rent is due i pay by standing order from my
business bank account, my girlfriend pays 70% of it and I pay the rest
of it with the aid of small grant aid I receive each week.
My girlfriend takes money out of her account gives it to me, and I lodge
this money into my business account.

Is the withdrawl info from my girlfriends bank account good enough to keep
for record purposes. I am a little concerned that someone may think that
this is money earned from the business.

Another question I have is in relation to VAT, I bought some equipment a few weeks ago, and I got a small grant to pay for some of it which the seller has received.
The business who sold it to me, as since stopped trading and I still owe them about 390 I can afford to pay about 300 now but it will take me a couple of weeks to get the other 90 which is the VAT that would be due on it.

What is the proper way of noting this down in the record books and when I
pay the business the 90 vat owed on it, will they send this payment off now that they are not trading. The business in question is asking for cash payment. I dont think this would be good proof for me that I have paid
the VAT if i claim back the VAT.
Any help would be much appreciated.

p.s. sorry for sounding like a novice, I really belive in my idea, and I feel
this business will take off in the next two months.

Kinetic^

davidbcr wrote:

My first question is, when the rent is due i pay by standing order from my business bank account, my girlfriend pays 70% of it and I pay the rest of it with the aid of small grant aid I receive each week.
My girlfriend takes money out of her account gives it to me, and I lodge
this money into my business account.Is the withdrawl info from my girlfriends bank account good enough to keep for record purposes. I am a little concerned that someone may think that this is money earned from the business.

Do you pay your rent by cash or cheque?? If you pay by cheque you should get her to transfer the money directly into your account every month as it gives you the record of this in your bank statement and it can be traced if needs be.

davidbcr wrote:

The business who sold it to me, as since stopped trading and I still owe them about 390 I can afford to pay about 300 now but it will take me a couple of weeks to get the other 90 which is the VAT that would be due on it. What is the proper way of noting this down in the record books and when I pay the business the 90 vat owed on it, will they send this payment off now that they are not trading. The business in question is asking for cash payment. I dont think this would be good proof for me that I have paid the VAT if i claim back the VAT.

Pay the remainder by cheque, whether its the €300 & €90, or the whole lot together. Did they issue you an invoice for the full cost of the equipment originally?? If they didn't then you're going to have to get another invoice for the remainder of the cost - the €390.

Listen, you seem to be wanting to keep records of everything you do, so my advice is to pay by cheque for everything that is going to be a substancial amount each month eg. rent, equipment etc.

I can help you with the following if need be, check out the link:
Bookkeeping

Victor

You can't separate the VAT like that. The €300 would contain a VAT element and so would the €90.