Reply to: Help!! Newbie very confused about Expenses

[fadanoid]

Not Your ******* Money! Company Money.noob

[Platypus]

as i need to be thinking about the expenses that will be occurring on a contract (such as travelling to and from work) and include this when negotiating rates with the client.

Correct!

In the same way that Tesco don't charge you for the cost of shipping the cereal bars you just bought to the store, but rather that's included in the shelf price.

P.S. Whatever made you think that if you SPENT £50 on business cards, you wouldn't be £50 down somewhere? Oh well.

[VectraMan]

Let me clarify so there is no doubt:

The money in your business bank account is not yours, it belongs to George Agdgdgwngo.

Monies.

[HairyArsedBloke]

DON’T LISTEN TO THEM

They are having you on. You can do whatever you like with the money. You are a director of the company so you can spend the money however you like.

[Clippy]

Let me clarify so there is no doubt:

The money in your business bank account is not yours, it belongs to George Agdgdgwngo.

[TheBigYinJames]

When is it my turn to shout at the noob?
It's not your money

[luke warm]

I don't think it's been said by anybody in this thread yet but you need to realise that the company's money is not yours.

[Mustang]

But the money in my business bank account is mine anyway.

[Mal Mode]
No no no no no!!!

The money in your Business account is not yours, it belongs to your LTD CO!!! You then have to "make it yours" by paying expenses, paying a salary, paying dividends or other LEGAL ways!!!!

You need to learn that you and MyCo are two DIFFERENT entities!!!!

[/Mal Mode]

[expat]

NickFitz answer says it all.
Your companies money is not yours.
...
There are limited ways you can get money from your company. ...

WHS.

Your company's money is not yours.

[alfatech]

Thanks for everyones input on this. It all makes more sense to me now!!

This completely changes the way i go about agreeing future contract rates as i need to be thinking about the expenses that will be occurring on a contract (such as travelling to and from work) and include this when negotiating rates with the client.

[The Lone Gunman]

NickFitz answer says it all.
Your companies money is not yours.
You put in an expenses claim to your company. Your company gives you a cheque or pays you direct.
Obviously if you have agreed expenses with your client then you claim off them.

Take good note of what Nick said.
There are limited ways you can get money from your company. Wages, expenses and dividends are legitimate. There are a couple of others (ask your accountant), but anything else would be regarded as theft or fraud.
Be very very careful.

[badger7579]

Just to give you an example..

My client agrees to pay employees of my company a rate of 23 pence per business mile. At the end of the month I invoice the agent for this expense. This money is then paid into my business bank account. (example 23 *400 miles = £92

I then fill out an expense claim form at 40 pence per mile (40 * 400 miles = £160) which goes to my accountant. They then add this to my payslip and this total is transfered from the business bank account to my personal bank account. Salary + expenses.

[TheBigYinJames]

Spot-on.

And OP, don't knock that "only it's tax free" part, that's the fantastic part about company expenses, so put through everything you can legitimately put through the company - computer equipment, subscriptions, portions of your utilities etc. It can add up to quite a few pennies over the year.

Very exceptionally, a client will agree to certain expenses being refunded directly to you, but in 15 years it's never happened to me.

[expat]

so am i right in saying that if an expense has not been agreed between myself and the agent/client then i don't actually get anything back?

The way im understanding it now is that you can claim back expenses from your own limited company but the only benefit to this is that it is not taxable. You don't actually get your money back? because the money in the business is the money that i have earnt without any expenses paid and i just withdraw a portion out of that account and put it into my personal account (For business expense). I am not actually getting my expense back because i own the company and it is my money in there anyway?

Spot-on.

What makes you think that anyone would pay you for the expenses in running your company? Who do you think would pay it back to you, the tooth fairy? Or do you just have a vague sense of entitlement....?

[NickFitz]

My accountant was saying that i withdraw the money out of my business bank account and put it into my personal account. But the money in my business bank account is mine anyway. i am still £50 out of pocket.

That, right there, in bold red text, is what you're not getting.

The money in your company bank account isn't yours. It belongs to the company. Legally, the company is a separate entity to you - it's like a whole other person, and you are not that person. Think of it as your own personal Frankenstein's Monster if that helps you to visualise it better

You may own the company, but that doesn't mean you own its assets such as the money it has in the bank.

The company uses its money to pay its employees (just you in this case). It also uses its money to reimburse its employees' legitimate business expenditure (such as your £50 on business cards). The company has to pay tax on its earnings (not your earnings - you just work for the company, which then pays you your salary) and whatever profit is left over can then be paid out by the company as dividends to its shareholders (just you, I assume, as you probably are the only shareholder).

But under no circumstances is the money in the company's bank account "your money" - and if you regard it as such, you'll get into very deep trouble with the authorities very rapidly