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Categories and examples

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Summary

A list of every category in Sage Sole Trader and some real-world examples of what to record in each. Use this if you're unsure where a transaction belongs.

Description

Categories tell Sage how each transaction affects your tax position. Sage gives you a fixed list that aligns with HMRC Self Assessment rules. You choose the category that fits each transaction best.

The product shows a short description next to each category. This article adds fuller, real-world examples for different types of business. For the rules on how categories work, read Choosing the right tax category for your transactions.

If a transaction feels unclear or unusual, speak to your accountant before you submit.

Money in categories

Category What you record here Real-world examples
Non-business money in Money that isn’t income from this business A tax refund from HMRC. Money from family or friends, a transfer from your personal savings, your own money put in to fund the business, a gift
Turnover The income you earn from selling your goods or services A customer paying an invoice, card reader takings, cash for a completed job, online shop sales, a deposit for booked work
Other business money in Business income that isn’t your normal sales A supplier rebate, a commission you earn, a referral fee, a royalty payment, an insurance payout for a business loss
Grants and funding Grants or support payments for your business A council business grant, a start-up grant, an innovation grant, a training grant, sector support funding
Sale of assets Money from selling things your business owned Selling an old work van, selling a used machine, selling office furniture, selling tools you no longer need

Money out categories

Category What you record here Real-world examples
Non-business money out Payments that aren’t business expenses Personal shopping on the business account. Money you take for yourself (drawings), your own Income Tax or National Insurance, a transfer to your personal account, a personal-use computer
Accountancy and other professional fees Fees for professional services Accountant fees for your tax return, bookkeeper fees, solicitor fees for a business contract, surveyor fees, architect fees
Advertising and marketing Promoting your business and your website Google or social media ads, flyers and leaflets, a newspaper advert, website hosting and domain fees, signage
Bank, credit card and other finance costs Charges and fees for business finance Overdraft fees, business credit card charges, card reader transaction fees, hire purchase interest, lease charges, monthly account fees
Business entertainment Hospitality for clients, customers, and suppliers Taking a client to lunch, drinks for a customer at an event, a meal to thank a supplier, hospitality tickets
Computer equipment and software Computers and software for your business A work laptop, a printer, a monitor, accounting software, design software, antivirus, a cloud storage subscription
Goods, materials and other costs of sales Items you sell or use to provide your service A plumber's pipes and fittings, a baker's ingredients, stock for resale, a hairdresser's salon products, a builder's timber and cement
Hotel and accommodation Overnight stays for business A hotel for an overnight job away from home, accommodation at a trade show, a guesthouse near a distant work site
Interest charged on loans Interest on business borrowing Interest on a business bank loan, interest on a start-up loan, the interest part of a loan repayment
Office equipment rental Renting or hiring office equipment Renting a printer or photocopier, hiring a franking machine, short-term equipment hire
Office stationery Stationery for your business Printer paper, pens, envelopes, ink and toner, printed business cards, letterheads
Other business expenses Business costs that don’t fit elsewhere Office tea and coffee, trade journals, safety clothing, such as hi-vis or steel-toe boots, branded uniforms, waste collection
Payments to construction industry subcontractors Payments to subcontractors for construction work Paying a labourer on a building job, paying a subcontractor for site work, paying a trade for construction services
Phone and internet Phone, mobile, and internet costs A business mobile contract, business broadband, a second phone line, the business share of a mixed-use phone bill
Postage Postage and shipping Stamps, Royal Mail postage, courier costs, shipping products to customers, recorded delivery
Property and equipment repairs and renewals Repairs and maintenance of premises and equipment Fixing a boiler at your premises, repainting the shop, servicing a machine, repairing a tool, replacing a broken part like for like
Rent, rates and insurance Premises costs and business insurance Rent for a workshop or unit, business rates, public liability insurance, professional indemnity insurance, alarm monitoring
Staff training and other costs Training and other costs for employees A training course for an employee, recruitment agency fees, an apprentice's course, recruitment advertising
Staff wages and salaries Pay and benefits for your employees An employee's wages, an assistant's salary, staff bonuses, employer pension contributions, employer's National Insurance
Subscriptions and memberships Professional memberships and subscriptions Membership of a professional body, trade association fees, a professional accreditation, an industry licence subscription
Travel expenses Fares for business travel A train ticket for a work trip, a bus or tube fare to a client, a taxi to a meeting, a business flight
Vehicle - other costs Other running costs for a work vehicle Vehicle road tax, the MOT fee, breakdown cover, such as AA or RAC, a parking permit
Vehicle fuel Fuel for a work vehicle Petrol or diesel for your work van, charging an electric work vehicle, fuel for business journeys
Vehicle insurance Insurance for a work vehicle Van insurance, business car insurance
Vehicle leasing Lease or hire of a work vehicle A monthly van lease, car hire charges, contract hire payments
Vehicle maintenance Repairs and servicing for a work vehicle A van service, new tyres, brake repairs, MOT repair work

CAUTION:

If you claim the mileage allowance, don't also use the five vehicle categories above. The mileage allowance already covers fuel, insurance, road tax, and repairs. Choose one method for each vehicle for the whole tax year. For more, read Recording mileage expenses.

Good to know

Money you take for yourself isn’t a wage. Record it as Non-business money out, not Staff wages and salaries.

For information about Construction Industry Scheme (CIS), read CIS in Sage Sole Trader.