Expenses in the name of the business or the person.

[Pest]

Tried to find the answer on this board but no luck but I am sure this has been asked before. If I incur business expenses and reimburse myself via Ltd co do these expenses have to be declared on P11D? Also how about the ones that are paid via Ltd cr card ?

Thanks and sorry if this answer is on the Board already.

[ASB]

Thanks all.

I will stick to using the Co accounts for accountany, ins etc and take the rest on a case by case basis.

What's the rulling for mobiles though? I know many companies provide their employees with phones that have "reasonable personal use" allowed without it being classed as a BIK.

Doesn't even matter if it's unreasonable personal use. it's still not a bik.

If the company pay your personal mobile bill it's a BIK. And possibly also subject to class 1a NI. You can only claim the cost of business calls.

When I still hgad a personal phone I claimed it all though.

n.b. you can probably get your supplier to put you company name above yours or similar which helps.

[Pondlife]

Thanks all.

I will stick to using the Co accounts for accountany, ins etc and take the rest on a case by case basis.

What's the rulling for mobiles though? I know many companies provide their employees with phones that have "reasonable personal use" allowed without it being classed as a BIK.

[VectraMan]

I buy everything myself as I have a credit card and my company doesn't, and there are advantages to using a credit card. Plus as I can't currently afford to pay off my credit card having money going in and out of the account is better for me.

I've never bothered putting any general expenses in the company name, so I hope that isn't an issue.

[MikeP]

We're talking more about corp tax, but it still makes little difference. If I buy kit from PC World or dabs I use my company name and pay with my personal credit card. I would imagine it hard for them to enforce that one with small business type invoices like cafes and restaurants.

Nevertheless, that all becomes irrelevant using flat-rate scheme

[nobody here but us chicke]

Vat ?

Wasnt there something about changes to the vat rules (EU wide) so that only invoices with the company name on could have the vat claimed on them ?

[MikeP]

Partially correct: for non-deductible expenses you're slightly better off to pay from a company account because you're paying a taxable expense with taxed money if you pay from your pesonal account. Your reimbursement then comes out of a company turnover that includes tax due on the non-deductible amount, so you're out by a percentage of a percentage, in other words some small amount that only becomes significant if you have a lot of them.

However these are few and far between, if any for most of us. The only non-deductible expenses I ever have are dividends and there's hardly a point of paying those out of my own pocket.

The only other non-deductibles that come to mind that I MIGHT incur are entertainment. But for a few pennies on rare occasions I'm not going to bother.

[philip@wellwoodhoyle]

As others have said, as long as it is for bona-fide business expenses, no problem at all. I don't even think that paying a company cheque for things like tax is necessary - after all the tax inspectors aren't the ones opening the mail and banking the cheques!

The areas where you do need to be wary are if the company pays directly for a personal liability of yours, i.e. if the company pays a personal mobile phone bill by direct debit. Whilst the tax affect is neutral, you are liable for NIC on it as the company is paying your personal liability - there is no corresponding relief for NIC as there is for tax. The other is where the company's income (i.e. from invoices) is paid directly into your personal account - only OK if the company owed you more than that amount at that time or if you immediately transfer the money to the company (i.e. same day).

[Mustang]

You might want to check with your accountant on this one. I had heard that being reimbursed was not as tax efficient as paying bills directly. For example, I am planning to get a company account on my mobile but at present I pay it myself and charge the company for the business portion.....

[MikeP]

Makes absolutely no difference in tax terms AFAIK. I prefer to use my personal accounts (pref. credit card) as much as possible because

a) it means more turnover through all my accounts - good for personal credit rating
b) one less account to deal with & one less card to carry makes it more convenient
c) using credit card, the money can gather interest in a savings account for another month (provided you pay your ccard fully each month and it's interest-free for that period).

...and another less scientific reason:
d) having arrears on on expenses means I can always draw some cash out of the company at short notice when I need it.

Even things like accountancy are via direct debit from my regular personal account. Only where the company name is important or a company cheque is required (e.g. VAT, Insurance, PAYE) do I use my business account.

[DaveB]

You can do both.

Regular expenses such as those exhorbitant accountants fees, insurance premiums and professional memberships can be paid via a direct debit from the co. account. Other "cash" expenses such as hotel bills, equipment purchases, incidentals etc can be paid personally and reclaimed if you dont have a co. debit card.

As long as you keep track of how things are paid for and you get the appropriate receipts you should be ok.

[Pondlife]

Have had a bit of a search and still haven't really found an answer.

Is it better to have the business' expenses paid direct by the company or paid by the person and reclaimed (obviously with valid receipts in both situations)? The reason I ask is that I would prefer all regular expense incurred by the business to be paid directly e.g. Insurances, Acc fees, business phone line etc and then claim for incidentals personally e.g. hotels, meals etc.

The reason I'm struggling is that it's sometimes a better deal doing something 'personally' e.g. mobile phone tariffs and rental accomodation (they want a much bigger deposite for a corporate let).

What do others do?

Thanks.

Edit: I am happy to take the abuse if this is a completely muppet question.