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Posted Wed, 10 Apr 2024 21:02:02 GMT by Amethystar
Hello, I need to create accounts for a hobby business that needs to declare earnings for the last tax year due to exceeding the trading allowance. I understand that with cash basis we enter receipts/expenses when we actually receive/pay the money rather than when we invoice or are invoiced for payments, but have a few questions about the smaller details. 1. I think I understand, from asking on Twitter, that with eBay sales we enter the full price of the sale as income and then the fees as an expense, on the day the payment reaches our bank account, not the day the sale takes place on eBay. Is this correct? 2. Re the above, presumably this would mean that if eBay held funds for any reason, we wouldn’t enter the sales in our accounts until they released the funds? 3. If we make purchases through eBay or elsewhere by debit/credit card or PayPal, does this mean we enter the cost on the date it shows as cleared through our bank account, rather than the date we actually made the payment (there’s usually 2-3 days processing between the two dates)? 4. Re the above how would this work with any payments credited to our PayPal balance - would we use the date the payment is received there, or the date we transferred the money into our bank account? Obviously making sure any balance was transferred within a reasonable timescale. Thank you very much for your help, Shula
Posted Fri, 19 Apr 2024 10:51:54 GMT by HMRC Admin 25
Hi Amethystar,
Please have a look at the guidance here:
Business records if you're self-employed
We cannot advise you how to apply accounting practice, as we are not accountants.
Thank you. 


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