Having not long started using this I have a query on disallowable expenses. VT includes them before giving nett profit or loss. My understanding (maybe wrongly) is that if they are disallowable they should show after nett profit has been calculated.
For example Nett profit £20,000 Drawings (marked as disallowable expenses) £15,000 Retained profit £5,000 VT shows this as net profit £5,000
Why are you marking Drawings as disallowable expenses? I've put them in as Capital : Drawings that way they are going nowhere near the Profit and Loss account.
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Never buy black socks from a normal shop. They shaft you every time.
I hadn't realised you could put Capital and drawings in that way (still new to the software) but having looked you are right, thanks.
The other payment I would have classed as disallowable is bank loan principle. I intended to split bank loan repayment between expenses - interest and disallowable - bank loan but I am guessing this will be wrong?
Peasie is right on the use of the Drawings account.
The loan should be set up as a liability account, under the creditors section (You could set it up in the bank account section, as an overdrawn bank account, as an alternative), and payment from the bank would be split £XXXX to the Creditors>Loan account and £YY to the Expenses>Interest Paid account.
The Disallowed ledgers are for things that are normal expenses for the financial statement but are dissallowed for tax ( Depreciation, some insurances, fines and penalties etc). They still show on the financial statements but are seperated to make tax computation simpler.
It is a matter of choice to use those accounts. I tend not to and prefer to do any adjustments at year end.
With VT+ you should not worry about "disallowable" expenses when you do your initial entries.
There is a facility on the "Tax data" link - Profit and loss accounts (Tax return format) where you can allocate the expense accounts against the Tax return categories, and do the disallowable expenses at that point too.
If you post the Loan using correct bookkeeping principals then you will not have any problems.
I.e.
Loan account - Balance sheet Monthly payment to loan - transfer from bank to loan Interest due - expense transaction on loan account.
