Contracting without bank card/account

[Scotchpie]

After contracting via an umbrella for a while, well several years to be exact, I today registered my Ltd. I have a new contract starting in two weeks. I'm told that it can take a couple to several weeks for the business bank account and card to be sent to me. So in the meantime, how do I account for expenses drawn from my personal account?

[mudskipper]

After contracting via an umbrella for a while, well several years to be exact, I today registered my Ltd. I have a new contract starting in two weeks. I'm told that it can take a couple to several weeks for the business bank account and card to be sent to me. So in the meantime, how do I account for expenses drawn from my personal account?

That's what the director's loan account is meant for - in this case you're lending yourCo money. Your accountant should be able to talk you through it.

[TheCyclingProgrammer]

Credit directors loan account for stuff you've bought in the company's behalf (try and get invoices in company name). There should be no P11D implications for these things. Office equipment, stationary, that sort of thing.

Credit your expenses account for out of pocket expenses like travel, subsistence etc. and reimburse yourself later. They will go down on your P11D at the end of the year.

[theAccountant]

Directors Loan Account, VAT and Dispensation

After contracting via an umbrella for a while, well several years to be exact, I today registered my Ltd. I have a new contract starting in two weeks. I'm told that it can take a couple to several weeks for the business bank account and card to be sent to me. So in the meantime, how do I account for expenses drawn from my personal account?

Scotchpe, this is fairly simple and nothing to be worried about. For the time being just treat the expenses as a 'Directors Loan Account'. This means that the company 'owes' you money for the expenses you've incurred on the company's behalf. Naturally you will need to keep all the receipts and invoices to justify the expenses.

If the company will be VAT registered (assuming you're not on a 'Flat Rate Scheme' for VAT purposes), then you can also claim the VAT back providing you meet some of the conditions (the link to the respective HMRC VAT Guide is HM Revenue & Customs ).

Furthermore, I would suggest you also complete Form P11DX. This Form allows you to make reporting expenses to HMRC a lot easier, and allowing you to avoid submitting Form P11Dss going forward. A link to the respective Form is http://www.hmrc.gov.uk/forms/p11dx.pdf . Note some HMRC Tax Offices are showing a bit of resistance to issuing dispensation agreements to 'One man service companies', in this event I suggest you make reference to HMRC Manual EIM30059 (link: EIM30059 - Dispensations: checking and authorisation of expenses payments ) and you should be fine.

Hope this helps.

All the best.

[Scotchpie]

Thanks for the advice everyone. I've been reading up a little over the weekend about bookkeeping so understand the Director's Loan account.

[theAccountant]

Pleasure.