Explain money paid into a business by a sole trader or partner

This article describes how to explain money paid into a business by an owner or partner as capital introduced if you have a sole trader, LLP or unincorporated landlord account.

Money explained as capital introduced will be added to your capital account. If you've taken money out of the business, read how to explain money taken out of a business by a sole trader or partner.

Navigate to the 'Banking' tab at the top of the screen and select 'Bank Accounts' from the drop-down menu.

Choose the relevant bank account from the list.

Select the transaction that you would like to explain.

Select ‘Money Received from User’ from the transaction ‘Type’ drop-down menu. Please note that this option will only be available for business bank accounts. You won’t see this option if the bank account has been marked as personal or for a user who has been allocated the role of ‘Accountant’.

Select the relevant user from the ‘Received from’ drop-down menu and select ‘Capital Introduced’ from the 'Category' drop-down menu.

Select ‘Explain transaction’ to complete the process.

If you have more than one transaction that you need to explain as capital introduced from the same user, tick the checkboxes to the left of the relevant transactions and select the relevant options on the right-hand side.

Select ‘Money Received from User’ from the ‘Type’ drop-down menu, the relevant user from the ‘Received from’ drop-down menu and the appropriate category from the ‘Category’ drop-down menu. Remember to include an appropriate description for the selected transactions. If you leave the ‘description’ field blank then the transactions will be given the original descriptions that came through for them via the bank feed import or bank statement upload.

Select ‘Explain [X] transactions’ to explain all the selected transactions in the same way. Read more on explaining multiple transactions at once.