Using a personal credit card for company expenses

[ittony]

Having recently set up a Limited Company and subsequently a business bank account with HSBC, I was rather surprised to find the only plastic that came with the account was a cash machine card. Given that a lot of my costs will need to be paid for by credit card, or at the very least a visa-based debit card, I'm stuck with using my personal accounts to pay everything from software and hardware, through to internet hosting and overseas subcontractors.

What are the implications of putting all this on my personal card? Can I just pay off my card with a balance transfer from the business account? Will the miscellaneous receipts in my own name and/or my personal credit card statement be enough to keep the tax man happy? And will I then have to put all this on a P11D?

Thanks a lot, ITtony.

[basshead]

If you pay for something for your business from your personal account, your company can reimburse you via cheque or bank transfer without any personal tax implication (i.e. you don't need to put it on your P11D), just record it in your company accounts (spreadsheet/book/fag packet) and keep a receipt as proof.

[malvolio]

HSBC do a full blown debit card on their business accounts, paid off automagically by monthly direct debit. Go look on their BB website for details. May have to build a bit of credit history before you qualify, although I got mine fairly well straight away.

[gingerjedi]

I've just had to pay for insurance and PCG membership via my personal account, so do just transfer the funds and keep a record or should I send a spread sheet along with my invoices and business bank statements and wait for my accountant to tell me what I should transfer in total for that month?

[PAG]

I am with HSBC and they have issued me with a company credit card. It is free for 12 months then they were going to charge annual fee (I think). Speak to your bank business contact.

[malvolio]

You need to have an expense claim - nothing fancy, as long as it records how much and on what - and pay yourself from YourCo's money. How often is really up to you, but monthly is good - I usually add it to my net salary.

Hint for the future - your are responsible for YourCo's money, nobody else. You shouldn't need an accountant to do the basics, although it is more convenient, so keep your own records up to date.

[philip@wellwoodhoyle]

Just a word of caution, NEVER use the companies money to directly pay off or pay towards your personal credit card, even for company expenses.

As mentioned above, the correct way is for the company to pay you and then for you to pay your credit card yourself. A bit more work, but essential.

The thing you have to avoid is for the company to satisfy a personal debt of the director (i.e. company directly paying a personal credit card). If that happens, you could be liable to NIC on the amount. Tax and NIC rules are not the same, under tax rules, the payment of the liability would be covered by the counter-liability of the amount owed by the company to you, but there is no likewise "setoff" under NIC rules. The PAYE inspectors love this kind of thing as they get to assess some NIC which justifies their existence.

[ratewhore]

Get yourself an Amex business chargecard. At least that way you won't be tempted to leave the balance on there like you can with a credit card...

[malvolio]

Get yourself an Amex business chargecard. At least that way you won't be tempted to leave the balance on there like you can with a credit card...

That's why I like the HSBC one. Because it is always paid off monthly, there's never any carryover - and you get a nice detailed statement of expenditure for your records.

[Bluebird]

Had a CC from HSBC from the day I opened the account..