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Taking a wage?

(7 Posts)
Flamesparrow Mon 28-Jul-08 09:35:13

How do you work out how much/when it is appropriate??

Bumfluff has been running about 18 months now. I am still paying off various stock. It is slow going, I'm not in debt when you look at what I owe vs stock held, but I do still owe.

Due to a money flow cock up I "borrowed" from the business account last month. I have never taken any kind of wage because I felt clearing the debts is the important thing right now.

Am I ok to keep the money I borrowed and write it off as a wage? It isn't vast amounts by any means (especially for 18 months work!!!), but it feels wrong because of the debts blush

I have never been self employed before, I have no idea what I am doing here!!! Help!

Eddas Mon 28-Jul-08 09:42:40

if you are a sole trader rather than a limited cmpany then you are fine to take money and keep it as wages(technically drawing) If you are a sole trader then the money is yours so use it as you see fit. If you are a company then the money is the companies and not yours IYSWIM

Flamesparrow Mon 28-Jul-08 09:44:25

Yup, sole trader

Eddas Mon 28-Jul-08 09:49:17

then you are fine to keep it.

Write it down in your books as 'drawings'. It doesn't go into your profit and loss account as an expense. You don't have wages as a sole trader.

As far as how much and when, that's up to you. If you have money in the bank then it should be fine to draw some of it to use. Even if you have debts. Obviously it makes sense to pay debts first but you do have to live.

Flamesparrow Mon 28-Jul-08 10:01:04

Fabulous thank you. Ireally should do a book keeping course blush

MrsBadger Mon 28-Jul-08 10:05:02

yes you are fine to keep it

DH is a sole trader and no matter how much he owes elsewhere in the business (within reason, obv) he draws a set amount each month into his personal account and treats it just as he would a salary.
He doesn't have stock though, which I imagine would make a big difference in the early days.

WestMidsAccounts Mon 28-Jul-08 10:16:15

As Eddas says, as a sole trader, you can legally take out whatever you want but don't forget to put some money aside for tax bills!

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