Since 2 January, I have been running a secondary occupation that is subject to VAT. I now need to make a number of large purchases and want to use my own savings to do so. How do I enter this in my accounts? I acknowledge that it is income, but that it does not come from sales…
It's not income! That would not be correct, because you did not earn that money with your sole proprietor, so of course you do not have to pay taxes on it...Search the learning center for terms such as: private, bank account, cash, capital, etc.
As follows: you transfer the amount from your private account to your business account with the note 'investment: purchases...'. You pay for the purchase with your business account and record the purchase invoice as an investment in your expenses. This way, everything is clear in the event of an audit. However, it is not particularly advantageous from a tax perspective to invest your own capital in your business, but that is another story... ;-)
In a sole proprietorship, there is no distinction between personal funds and business funds, is there?
So it doesn't matter which account the payment is made from, and you simply record the expense (it is best to have your business number stated on the invoice and to indicate what it was intended for).
You really should try it out for yourself. Even if you don’t have a company number yet, you can already go ahead.
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