IT Contractor's Expenses Mess

[NotAllThere]

I'm winding you up

Well stop it. It's be nice to newbies month. Cojak sez so.

[Sockpuppet]

Why do you say so, is it not as simple as clearing the money back to company. do you reckon there is more in hiding?

I'm winding you up

[tyut4669]

I think soap with integral rope is about to become a large part of your life

Why do you say so, is it not as simple as clearing the money back to company. do you reckon there is more in hiding?

[NotAllThere]

If it hasn't gone over year end, then it could be converted to a director's loan without interest. Less than 5K, you see. But you REALLY need to talk to an accountant.

[FarmerPalmer]

ask an accountant, but could you repay a £4.7k director's loan with interest

[Sockpuppet]

Turn over is 80k, original expenses are 4k and added on expenses are about 4.7k.

I think soap with integral rope is about to become a large part of your life

[tyut4669]

Turn over is 80k, original expenses are 4k and added on expenses are about 4.7k.

[Clare@InTouch]

What are you referring to?

The value of the expenses added in that you didn't actually incur? How do they compare to the turnover of the company?

Materiality can make a difference to how you proceed. If you added in £5 extra in motor & travel and your turnover is £100,000 then you can simply reverse it this year. If you added in £50,000 then it's a different situation!

[tyut4669]

What sort of values are you talking about here?

What are you referring to?

[NotAllThere]

I'd suggest you find an accountant you can trust to sort things out. Paying the expenses back, with the appropriate interest rate is probably the best thing. But an accountant will be able to work out how to minimise the repayment and interest - legally.

[Clare@InTouch]

What sort of values are you talking about here?

[Wanderer]

Can I pay back the expenses that I can not justify back to the company now (after couple of years). It sounds like I can. In which case, what are the procedures followed to disclose it?

Just close your company and start a new one with a clean slate...

[Olly]

Name and shame....which accountant told you to claim expenses you never incurred and weren't entitled to?
Sorry can't help with how you correct the accounting "error".
Accountant may not have taken the time to give you the full picture because of just that...it would take time....not because they benefit in any other way.
How many other people are in the same boat as you? Answer: I expect not too many, I would hope the premise that you claim only for what you spent is a fairly obvious one. Dispensations, £5 a day "allowances" etc are extras to add on only when it's clear they apply....who knows maybe they do and your accountant was doing right by you?

[tyut4669]

I have been doing my IT contracting in limited company way. During my first year, my accountant lured me into thinking that there is a group think wherein I can put in more expenses because there could have been expenses etc. It slowly got into my head that I am held responsible and not my accountant. I do not want to earn single penny more than what I should be.

Can I pay back the expenses that I can not justify back to the company now (after couple of years). It sounds like I can. In which case, what are the procedures followed to disclose it?

1. Just pay back the expenses to the company with the interest now? (I see this as most correct thing)
2. Or, Just pay back the expenses to the company without interest?
3. What are the implications if I do not do this now? Can this potentially mess up my accounts now?

Any experiences in these lines? Why would my accountant do not give me clear picture in the first place about this. How does that benefit him. After me getting to understand the accounts bit more and slowly I realize all this. How many people in the real world who do not understand ABC of accounting and do not know that director is responsible, already doing this without even having the knowledge of the implications?