Other operating income is reflected separately to sales or main income both in the Micro or Small Accounts and the Corporation Tax Returns (CT600). This is because other income has no direct relationship between the company's financial health and the turnover.
Trading Income:
Trading Income is regarded as revenue that is related to a company's main trading activities. Examples of this include the sale of goods and services. This is reported as the main source of income in the company accounts.
Other Income:
Other income is anything that is not part of the core functions of the business, but please note that it is still taxable income. They are viewed as additional earnings. Examples of this include interest income, gain on foreign exchange transactions, sale of assets and etc.
Example:
Let us consider that I have an event catering and decorations company. My income consists of sales from providing the agreed service and I have also received some income from selling some assets that I no longer need and some bank interest income. The last two sources of income would be regarded as 'other income' and any income directly related to the sale of the service and or goods would be reflected as 'sales'.
Extra Information:
It is important to keep detailed records of your income and the source, so that filing is easier and straight-forward! Please visit here to learn how you can keep up-to-date records for your company.
If you would like to file for a property company, please note that this is also regarded as 'other income'. You can find out what is expected of you when filing for property companies here.
