Expenses - company card or own cost and claim?

[AdamPlanUk]

Hi all,

So I have started travelling a lot more for my current contract - expenses going to the £500 a month mark now. Previously I would just pay with my own money, claim the expenses through my ltd and invoice the client. Someone has recently suggested using the company debit card to pay the costs directly rather than using my money and claiming back.

How exactly would this work tax wise? I use freeagent which let's me categorise the transactions so that account for vat ect, but otherwise what's the benefit of using the company card instead of my personal cash?

[northernladuk]

Sounds like a good opportunity to get a credit card that gives you points/cashback and start collecting IMO

[TheCyclingProgrammer]

You can do this but for things like travel and subsistence you'll still need to report them on your P11D.

[AdamPlanUk]

Have done the credit card but a personal not business one (hence me using my funds at the moment. Points=prizes

So with them included on my p11d I would still need to pay the tax on them? Excuse my ignorance will be doing my first ever p11d shortly.

[Platypus]

So with them included on my p11d I would still need to pay the tax on them?

No, because they are refunded business expenses, they are not income. There's somewhere else on your tax return where you enter the same figure to cancel out P11D benefits. Your accountant will know this and do this for you.

[captainham]

Plus you should just apply for a dispensation IMO. Takes minutes to apply then no need to worry about P11D anymore (or rather, no need for your accountant to worry )

[SueEllen]

Plus you should just apply for a dispensation IMO. Takes minutes to apply then no need to worry about P11D anymore (or rather, no need for your accountant to worry )

Thanks for the reminder. I have to get another one.

[malvolio]

Or Plan B - get a company card, put all wholly and exclusively business expenses on there and ignore personal money completely. Result, no P11D at all... Hector won't care since there is no tax involved either way as long as they are genuine expenses.

Why make life complicated?

[Jessica@WhiteFieldTax]

Sounds like a good opportunity to get a credit card that gives you points/cashback and start collecting IMO

^yep. Good idea.

[Jessica@WhiteFieldTax]

Or Plan B - get a company card, put all wholly and exclusively business expenses on there and ignore personal money completely. Result, no P11D at all... Hector won't care since there is no tax involved either way as long as they are genuine expenses.

Why make life complicated?

IMV that still has to go on P11D if you take a strict interpretation of the rules:

C Vouchers and credit cards
Enter the total of:
• the cost to you of providing any vouchers
(including season tickets) which can be
exchanged for money, goods or services
• any extra cost to you in providing the
money, goods or services for which the
vouchers are exchanged
• all expenses and other payments met by
credit cards you provided, except
– expenses directly in connection with the
car(s) at section F
– expenses more appropriate to section N.
Do not include any vouchers, such as cash vouchers, which have suffered tax under PAYE (see part B above).

That said my experience over c10k P11D returns and a 0% query rate is that HMRC don't worry about reporting of clearly deductible items be they paid on private or business card, with or without dispensation: there's no tax lost so why would they?

I saw today that the Office of Tax Simplification has recommended along the same lines recently.