Car hire and fuel using business debit card. Tricky situation!!
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    Default Car hire and fuel using business debit card. Tricky situation!!

    Hey lovely members

    I was wondering if you can give some advice!

    Basically I used my Ltd company debit card to rent a car and also for the fuel
    Since I have learnt my lesson (too late!?) I realise this will come under BIK rather than a business expense. Since the car rental+fuel is a huge expense bill, I was wondering what is the best way to deal with this? I have 2 options that i can think of:

    Option 1: 'Reverse expense' the amount to the company account and then show it as an expense.

    Option 2: Suck it up and just pay BIK tax

    I did some research on HMRC website but there is no clear mention of Car rental expense!?

    Many thanks
    Clare

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    Debit the transactions to the director's loan account and then repay them, either by declaring a dividend and crediting the payment directly to the DLA, or by actually repaying the money to the business account.

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    I'd suggest getting a decent accountant.
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    Quote Originally Posted by ltd haven View Post
    Hey lovely members

    I was wondering if you can give some advice!

    Basically I used my Ltd company debit card to rent a car and also for the fuel
    Since I have learnt my lesson (too late!?) I realise this will come under BIK rather than a business expense. Since the car rental+fuel is a huge expense bill, I was wondering what is the best way to deal with this? I have 2 options that i can think of:

    Option 1: 'Reverse expense' the amount to the company account and then show it as an expense.

    Option 2: Suck it up and just pay BIK tax

    I did some research on HMRC website but there is no clear mention of Car rental expense!?

    Many thanks
    Clare
    How long did you rent the car for? Just a day for a business trip or for longer?
    Where there's muck there's brass.

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    Quote Originally Posted by northernladyuk View Post
    How long did you rent the car for? Just a day for a business trip or for longer?
    Its for 3 months actually. As in rented a car on a monthly basis :0

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    Quote Originally Posted by TheCyclingProgrammer View Post
    Debit the transactions to the director's loan account and then repay them, either by declaring a dividend and crediting the payment directly to the DLA, or by actually repaying the money to the business account.
    Thanks. That will help, will look into doing that!

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    Quote Originally Posted by northernladuk View Post
    I'd suggest getting a decent accountant.
    thanks

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    Who rented the car. You or the company ? i.e who's name is on the rental agreement ?

    If yours: then you have simply taken a loan for that amount. Repay it or post it to the dca and sort it out later (physically rwpaying or debiting agains future dividends. Don't forget the potential advance corp tax etcbif oustanding for 9 months). This is what was alluded to by tcp.

    If the companies: You can always do the above but strictly should not. Though there is an argument you are repaying 100% of the cost so it is outwith the specific regime for company cars. Alternatively charge the costs to the company accounta and simply treat ir as a company car. The net result of this is that the taxable income which you will pay tax via self asessment and the co will pay class 1a ni will lukely be more than the effective tax suffered by repaying feom post tax income.

    Your accountants should advise the mwrits and the best way fowards for your specific circumstance- likely the first if divisends etc are being paid

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    Just repay it, claim the 45p a mile for the business related journeys, and remove any paperwork from company records, as long as you haven't prepared final accounts - imho of course.

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    Quote Originally Posted by ASB View Post
    Who rented the car. You or the company ? i.e who's name is on the rental agreement ?

    If yours: then you have simply taken a loan for that amount. Repay it or post it to the dca and sort it out later (physically rwpaying or debiting agains future dividends. Don't forget the potential advance corp tax etcbif oustanding for 9 months). This is what was alluded to by tcp.

    If the companies: You can always do the above but strictly should not. Though there is an argument you are repaying 100% of the cost so it is outwith the specific regime for company cars. Alternatively charge the costs to the company accounta and simply treat ir as a company car. The net result of this is that the taxable income which you will pay tax via self asessment and the co will pay class 1a ni will lukely be more than the effective tax suffered by repaying feom post tax income.

    Your accountants should advise the mwrits and the best way fowards for your specific circumstance- likely the first if divisends etc are being paid
    Thanks for your insight in this. The bills are on my name so I will take it as DL

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