Explaining business interests and money received

Create separate working lists for the value of your business interest, sums owed to you, employment income and self-employment income. FDF1 addresses business interests in Section 2.9, employment in 2.14 and self-employment or partnership income in 2.15. A figure can be relevant to more than one explanation without being added twice to the same total.

Turnover, profit and drawings answer different questions. Turnover records business sales; profit reflects the relevant accounting basis and expenses; drawings record money taken from the business. None should be substituted for another merely because it is the only figure currently available. Note the financial year, source accounts and any provisional estimate, and ask the accountant to explain differences.

Trace personal receipts to their source: remuneration, dividend, expense reimbursement, loan repayment or another identified category. Where a company pays a personal expense, record the payment and its context for review rather than hiding it among business operating costs. A company benefit is not necessarily cash paid into your bank account; it still needs an intelligible explanation.

For a director's or member's loan account, confirm who owes whom, the closing date, movement during the period and the evidence supporting the balance. A debit and a credit loan account can have very different implications. Retain the ledger or accountant's explanation; do not assume that the balance is immediately available spending money or that every repayment is fresh income.

For a value entered in the business-interest section, explain the basis and limitations of the estimate. Distinguish the business's assets and liabilities from your interest in that business. Do not claim a formal valuation unless one exists. If liquidity, restrictions or disputed ownership affect the explanation, record the issue for your attorney rather than inventing a discount.

Before export, cross-check the business-interest total against the income sections and bank receipts. Use labelled supporting records for the financial period and calculations relied on. Rule43 Disclosure calculates the figures you enter; it does not audit accounts, establish an asset's legal treatment or determine an appropriate maintenance order.