Quick accounting question

[Jamiecool]

Is it ok for my employee to buy goods such as materials and fuel from their own bank or cash funds, then send receipt into office and we pay amount directly into their bank?

Is this a legitimate way to claim Vat back on employee purchases related to the business?

[Eric Mc]

It is "possible" but it is best avoided or kept to a minimum. It's always best policy for a business to pay its costs out of its own resources.

Many organisations will have a system in place to reimburse employees and directors for business costs they have paid out of their own pockets. If the costs are legitimate business costs, the business can claim these costs against their profits in the normal way and reclaim Input VAT if appropriate.

If a purchase is over £250, for VAT purposes it will need to contain quite a bit more detail than a small value invoice. One of these details is that the name and address of the purchaser needs to be shown on the invoice. If an item is being bought and paid for by an individual then it may not have the correct purchaser shown on the invoice - and therefore would not be valid for a VAT reclaim.

[Jamiecool]

Thanks Eric, It’s mostly for Fuel and last minute materials etc