Company / Expense Tax Query

Buttercake

Hi folks

If I'm a director of a company and I buy something out of my own money for the company, say a computer for €2000

If I have already paid myself €3k for the month but haven't yet filed a P30 for that month yet, can I put the €2k for the computer against my wages as an expense, so my taxable income/P30 shows €1k (take home pay)?

And then I can claim the 23% vat back for the company vs Sales?

So then the purchase becomes a purchase of the company when doing the Vat returns?

Thanks in advance (sorry tax noob)

gerrybbadd

Buttercake wrote: »

Hi folks

If I'm a director of a company and I buy something out of my own money for the company, say a computer for €2000

If I have already paid myself €3k for the month but haven't yet filed a P30 for that month yet, can I put the €2k for the computer against my wages as an expense, so my taxable income/P30 shows €1k (take home pay)?

And then I can claim the 23% vat back for the company vs Sales?

So then the purchase becomes a purchase of the company when doing the Vat returns?

Thanks in advance (sorry tax noob)

I don't think so. Your wages would show as drawings in your accounts.

When entering the 23% for VAT on your return, there would have to be a corresponding expense shown to account for the VAT.

Not only that, but by reducing your take home pay to 1000, PAYE, USC, PRSI etc would not have been paid then on the other 2000

Buttercake

thanks gerry

dont meant to beat a dead cat

If for example, I needed to purchase the computer online using my personal credit card.

I transfer €2k from the company account to my account, purchase and then submit the receipt as a purchase of the company

would that count as a wage or an expense against the wage?

gerrybbadd

Buttercake wrote: »

thanks gerry

dont meant to beat a dead cat

If for example, I needed to purchase the computer online using my personal credit card.

I transfer €2k from the company account to my account, purchase and then submit the receipt as a purchase of the company

would that count as a wage or an expense against the wage?

I'd say in that kinda case, it wouldn't really count as a wage, but a legitimate business expense.

nompere

There is a technical tax issue in that the VAT invoice won't be in the name of the company.

While it's quite common for company directors to buy things using their personal credit card, there's much to be said for getting the invoice made out to the company - particularly when the item is going to be demonstrably used by the company.

It's true that it would be quite a picky Revenue auditor that denied the VAT claim, but why give them the opportunity?

Buttercake

nompere wrote: »

There is a technical tax issue in that the VAT invoice won't be in the name of the company.

While it's quite common for company directors to buy things using their personal credit card, there's much to be said for getting the invoice made out to the company - particularly when the item is going to be demonstrably used by the company.

It's true that it would be quite a picky Revenue auditor that denied the VAT claim, but why give them the opportunity?

Yep the invoice for this example would be made out to the company..

its more so would the funds for the purchase count as a wage or if a wage was paid already but not filed and the purchase was made would/could it count against the wage

bbari

Buttercake wrote: »

Yep the invoice for this example would be made out to the company..

its more so would the funds for the purchase count as a wage or if a wage was paid already but not filed and the purchase was made would/could it count against the wage

if you bought a computer for the business using your personal credit card, you can transfer €2,000 from your business to your personal bank. This will not be your wages and doesn't need to go thru your payroll.

Now the purchase is paid by the Company (via you) and the invoice is made payable to the Company, you are entitled to claim the VAT back on this purchase.