Capital introduced and sole trader

How is capital introduced dealt with in a profit and loss account

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Hi all,

I am a sole trader and I have a simple business model - re-selling other people's products to my own customers.

I have a business bank account. From time to time I have put money into the business account from my personal bank account.

I also pay myself "drawings"/wages from the business account.

For the purpose of working out my profit or loss for my self assessment, can anyone tell me how the capital introduced is dealt with?

Do I simply deduct it from the drawings/wages I pay myself?

Thanks

N

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panda ketteringUK
By ketteringUK
18th Aug 2018 21:20

as a sole trader you can't pay yourself wages - you can't have a contract with yourself. As for the rest - I suggest to see an accountant :)

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By Tax Dragon
18th Aug 2018 22:47

Look at the last three words of your question. "I pay myself". Demand a pay rise in the morning.

What you seem to be thinking is either that the money is not taxable while it's in the business account or that you get taxed twice, once when you make a profit and again when you pay yourself.

You shouldn't have to think too much more to realise that both are wrong.

Establishing the amount on which you actually are taxable is probably a job for a professional.

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