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Freight expenses

How do you classify a freight expense that has nothing to do with buying or selling?

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I understand Carriage-in and Carriage-out expenses. But what about transporting goods that has nothing to do with buying or selling (e.g. it might be moving stock from an exhibition to a warehouse or whatever). How is this generally classified?

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By David Ex
10th Jul 2021 14:48

If you are still a self-employed artist, I’m pretty sure no-one looking at your accounts will be too concerned how you classify costs. Why not just have an account for “freight costs - other”?

What’s your specific concern? Who sees your accounts?

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By Paul Crowley
10th Jul 2021 15:17

It does not matter what you call it
What matters is whether it is alowable for tax
There is no standard set of compulsory terms.
Your accountant would usually decide an appropriate title
If you are your own accountant you decide

Options:
Tranport
Movements
Internal carriage
Sundry expenses
Tax allowable other costs

If sending to the gallery in expectation of sale then it could even be cost of sales

Bookkeeper syndrome
Showing 35 different types of costs, all less than £100, that an accountant would group into less than 5 types

Sage has at least 7 types of motor expenses on its chart
The accountant then just adds them all together as motor expenses

Look at the tax return self employment page.
My guess is all the expenses are in box 20 with no breakdown at all

From return

Allowable business expenses
If your annual turnover was below £85,000 you may just put your total expenses in box 20, rather than filling in the whole section.

11 Costs of goods bought for resale or goods used
£ • 0 0
12 Car, van and travel expenses
– after private use proportion
£ • 0 0
13 Wages, salaries and other staff costs
£ • 0 0
14 Rent, rates, power and insurance costs
£ • 0 0
15 Repairs and maintenance of property and equipment
£ • 0 0
16 Accountancy, legal and other professional fees
£ • 0 0
17 Interest and bank and credit card financial charges
£ • 0 0
18 Phone, fax, stationery and other office costs
£ • 0 0
19 Other allowable business expenses – client entertaining
costs are not an allowable expense
£ • 0 0
20 Total allowable expenses – total of boxes 11 to 19

HMRC just not interested unless they enquire into your return. And all they want to know is whether the costs are tax allowable

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Replying to Paul Crowley:
RLI
By lionofludesch
10th Jul 2021 19:27

Paul Crowley wrote:

It does not matter what you call it
What matters is whether it is alowable for tax
There is no standard set of compulsory terms.
Your accountant would usually decide an appropriate title
If you are your own accountant you decide

Options:
Tranport
Movements
Internal carriage
Sundry expenses

Or, another option, get an accountant.

Thanks (1)
Routemaster image
By tom123
10th Jul 2021 15:42

Paul presents a very comprehensive reply from a compliance perspective.

My view, from a management accounts perspective, is what do you want to keep track of?

The first is "What" you spent - ie carrriage.
The second is "Why" you spent it - ie exhibitions.

Of course, if all of this stuff adds to a couple of K, just choose one heading.

I generally go with "What" we did.

But, exhibitions are infrequent, and cost shed loads - so, when we have one, (such as at the NEC for example) I will group all related costs to that project in a heading such as exhibitions - even if, on a more day to day basis, you would put each individual code somewhere else.

I will be asked "how much did the NEC cost in 2019" - hence my choice.

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Replying to tom123:
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By Paul Crowley
10th Jul 2021 15:59

Who What and Why
Perennial questions to address

Bank account shows Who
Annotations needed for the What and Why

Autofeed can only do the who and it guesses what

Spreadsheets can do all three very easily if used correctly and operated more than one a year

Concur completely on your exhibitions example

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By benhopeartist
12th Jul 2021 11:12

Thanks for the helpful / interesting parts of your replies.

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Replying to benhopeartist:
Melchett
By thestudyman
13th Jul 2021 13:41

benhopeartist wrote:

Thanks for the helpful / interesting parts of your replies.

But you have not answered the questions from the other posters, who could be in more position to help if they know the what and why.

Especially in relation to your primary selling activity, only then can we make a better assumption of if the cost should sit under cost of sales or somewhere else.

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Replying to thestudyman:
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By benhopeartist
13th Jul 2021 14:01

I have enough from here and other sources to be going on with thank you.

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Replying to benhopeartist:
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By Hugo Fair
13th Jul 2021 14:23

Is that the politest version on this site of "It's my ball and I'm taking it home"?

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Replying to Hugo Fair:
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By benhopeartist
13th Jul 2021 14:49

Hehe no. I meant nothing more nor less than what I said. And the original question was just as specific as it needed to be for my purposes.

Many thanks.

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