Claiming Expenses from your own Company

ve

Hi, quick question regarding expense claims.

If you were to use your own personal credit card to purchase E.g. equipment for use by your company, could you then in theory charge this as a expense to the company?. Claiming back the total cost incurred from the company (tax free?). The company could then claim VAT back on the purchase (if VAT registered). Is this the case?

If so, in order to account for this would you simply need to draft an expense claim, and attach the invoice/receipt for the purchase?. Then the company would file the purchase with the supplier listed as "you" and the cost break down according to the expense claim received and corresponding invoice/receipt. Considering I would be the "seller" does this mean that the date I submit the expense claim to the company, is the date that the company files it's purchase (when claiming for VAT). E.g. If I buy in March, but don't submit expense claim until June, does this mean that the company would be claiming back the VAT for a purchase made in June and not March?

I appreciate if anyone could clarify this for me

jerryob

Assuming you are one of the directors, it is plausible that you are purchasing equipment/suppliers for the benefit and use of the company. I am in a similar position, putting flights/supplies/etc. on my personal card. How I account for this is that I issue a invoice from me to the company, push through the VAT to the company, issue a directors loan to the company, mark down the asset/expense in the purchase ledger, and personally issue an expenses claim to the company. Obviously, I have to file a personal VAT return, and a company VAT return.

All this is extremely messy, but it has worked for me after initial company registration. But now I am in the process of "professionalising" the company by getting a business bank account, business credit card, chequebook, etc. This will not only simplify things, but also show a clean "paper trail" for any revenue audit or simply for pulling your end-of-year accounts together. The director loans are easy to track, as are all company transactions, etc. and should help you sync up with your purchase/sales/cash ledgers.

Some people have suggested to me to open up a seperate bank account for VAT, obviously linked to my business current account. I'm considering this, as the in future I expect alot of VAT transactions.

Hope this helps.

ve

Thank you very much for your response Jerry;

jerryob wrote: »

How I account for this is that I issue a invoice from me to the company, push through the VAT to the company, issue a directors loan to the company, mark down the asset/expense in the purchase ledger, and personally issue an expenses claim to the company. Obviously, I have to file a personal VAT return, and a company VAT return

Just to clarify the above. I have to do the following when I purchase something on behalf of the company...

1. Issue a VAT invoice to the company, as the supplier of the goods or service
2. Issue a directors loan to the company
3. issue an expense claim to the company after the invoice has been registered
4. File a personal VAT return
5. File a company VAT return

In the above how do I perform steps 1, 2 & 4. I am personally not VAT registered but the company whom I am a director is. So how can we charge a company VAT if I personally am not VAT registered. Apologies for my lack of understanding on this subject.

Initially you see my understanding was the following...

1. Purchase goods or service using my own credit means
2. Draft an expense claim (detailing whom supplied me with the goods/service, subtotal, vat, total cost, vat number of my supplier)
3. Attach receipts/invoice for goods/service to expense claim form
4. File puchase in company purchase ledger, with supplier = "me", and accounting for costings
5. Then simply transfer the total from company account to my own account

What is wrong with the above?

Culchie

Set yourself up as a debtor, same as any other debtor.

The business owes you money, you are the supplier to the business. Process any VAT the same as any other.

Would seriously suggest you get yourself a company cheque book, business bank account and a business credit card is a neccessity.

ve

Thank you for your response Culchie

Culchie wrote: »

Would seriously suggest you get yourself a company cheque book, business bank account and a business credit card is a neccessity.

I have all those except for the business credit card. The reason why I don't have the business credit card is that the bank/card terms pretty much makes it a cash card in that it has to be cleared every month, which for cash flow reasons does not suit us at the moment.

Also a lot of the purchases that I would be making on behalf of the business would be via e-commerce systems where credit card payment is the only option. I mean for example if I was to book a flight, I wouldn't exactly be sending Ryanair Accounts Dept. a cheque in the post.

It seems that there are different ways of doing what I'm trying to do, and I just want to make sure that the approach I'm taking won't leave me open to problems in the future if/when the company is audited.

ScouseMouse

When I purchase something for my business by way of cash or credit / laser cards, I just write myself a cheque for the same amount. I treat the receipt for the purchase as the bill and cash the cheque myself.

So. If I go to the cash and carry and laser 500 euros, I go to my shop and write a cheque to myself. I mark the cheque stub "cash and carry invoice number xxx" and my books are fine.

Culchie

ve wrote: »

Thank you for your response Culchie

I have all those except for the business credit card. The reason why I don't have the business credit card is that the bank/card terms pretty much makes it a cash card in that it has to be cleared every month, which for cash flow reasons does not suit us at the moment.

.

Sure, it depends on your business. I find the credit card critical as I need to make some instant purchases via phone, and quite often (as my business is young) I'm dealing with first time suppliers for new products for new projects, and credit facilities are usually not open to me until a second order is placed, and an account has been set up.

The credit card statement is now VAT compliant so I find it great to tot up the receipts at the end of the month.