"wholly and exclusively for business reasons" with two businesses?

[JRCT]

I have two LTDs that are entirely separate to each other and completey different business types. However, I need a laptop for each of them.

How do you work the "wholly and exclusively for business reasons" on expenses when I'm going to use it for both?

Is it as simple as just claiming the whole lot on one LTD and nothing on the other? It's not exclusive then is it? I'm sure that's open to abuse if so.

[Clare@InTouch]

With a laptop you can have some personal use of it, so you could buy it on one company and use it on the other without any issues.

Other assets may be more complex as they wouldn't always have the "insignificant private use is ok" bit.

[malvolio]

If I have two LTDs that are entirely separate to each other and completey different business types. However, I need a laptop for each of them.

How do you work the "wholly and exclusively for business reasons" on expenses when I'm going to use it for both?

Is it as simple as just claiming the whole lot on one LTD and nothing on the other? It's not exclusive then is it? I'm sure that's open to abuse if so.

If both need a laptop, why don't they both each buy their own?

Or are you one of these strange people that buys things for the Company and then claims the money back, presumably for the thrill of not knowing what what you're doing is the right solution...?

You, YourCo and YourCo2 are three different people (literally). Each should spend their own money, nobody else's.

[Craig at Nixon Williams]

In theory each business could claim for it’s own laptop. Therefore if you only buy one laptop and claim for it through one company then I can’t see HMRC having a problem; the alternative of buying two laptops would result in them collecting less tax overall.

Craig

[JRCT]

If both need a laptop, why don't they both each buy their own?

Or are you one of these strange people that buys things for the Company and then claims the money back, presumably for the thrill of not knowing what what you're doing is the right solution...?

You, YourCo and YourCo2 are three different people (literally). Each should spend their own money, nobody else's.

I am strange in many ways, but not in the way you suggest.

I used the example of a laptop because it's an easy one to understand, but there could be a few things that I could legitimately claim with 1 LTD, that might be problematic with 2 LTDs.

If I travel to 2 clients in the same day and back home, with only one LTD I can claim that travel (assuming my 40%, 24 month is ok), but if they're one client for each of the LTDs in the same day, how do I work that triangular jounrey from home office to client 1 (of LTD 1) to client 2 (of LTD 2) and then back to my home office?

No leg of that journey is "wholly and exclusive".

[TheCyclingProgrammer]

Just put it through one business. It is a slightly unusual situation but I can't imagine it would be questioned.

The only potential complication I can think of is VAT. Are both companies VAT registered and if so are they both on the FRS? Depending on the answers to that question might determine which company you should put it through in order to reclaim the VAT if possible.

[TheCyclingProgrammer]

I am strange in many ways, but not in the way you suggest.

I used the example of a laptop because it's an easy one to understand, but there could be a few things that I could legitimately claim with 1 LTD, that might be problematic with 2 LTDs.

If I travel to 2 clients in the same day and back home, with only one LTD I can claim that travel (assuming my 40%, 24 month is ok), but if they're one client for each of the LTDs in the same day, how do I work that triangular jounrey from home office to client 1 (of LTD 1) to client 2 (of LTD 2) and then back to my home office?

No leg of that journey is "wholly and exclusive".

Actually I'd say the journey to Client 1 is wholly and exclusively for Ltd 1 and the journey from Client 1 to Client 2 and then home is for Ltd 2.

[TheFaQQer]

Actually I'd say the journey to Client 1 is wholly and exclusively for Ltd 1 and the journey from Client 1 to Client 2 and then home is for Ltd 2.

That's how I would split the expenses

[LisaContractorUmbrella]

With a laptop you can have some personal use of it, so you could buy it on one company and use it on the other without any issues.

Other assets may be more complex as they wouldn't always have the "insignificant private use is ok" bit.

Last I heard from our dear friends at HMRC a laptop couldn't be expensed as there was an intrinsic duality of purpose - that's not saying that it couldn't be bought through the business but just that it would be recorded as an asset purchase - would you say that's right Clare?

[JRCT]

Actually I'd say the journey to Client 1 is wholly and exclusively for Ltd 1 and the journey from Client 1 to Client 2 and then home is for Ltd 2.

But how is that different to me going from home to client 1, then from client 1 to visit my auntie marjorie in Stockport and then home?

In that scenario, I wouldn't be able to claim any of that journey.