Buying stuff for a ltd company and claiming back question
Discussion
Hi,
Quick question.
We need to buy some computer stuff, but Natwest has given me a business "charge card" (Mastercard) with a limit of £500 per month. They said the limit won't increase if I pay money onto it (ie, pay it so its in credit then spend the money). We have the money in the company account, so don't need the credit, but currently I have no means to actually pay for the goods.
I need to buy around 2k of gear, from an online supplier. I can't do this with the limited company card due to the limit, and the company does not take cheques etc.
Can I pay for the stuff with my personal account switch card and then pay my self back right away with a company cheque, logging the online shops invoice with the VAT etc?
If I do this, can we still claim the VAT back?
We arn't VAT reg'd yet but will be in a few months, so I don't want to miss out on the VAT on this purchase.
Many Thanks,
Sam
Quick question.
We need to buy some computer stuff, but Natwest has given me a business "charge card" (Mastercard) with a limit of £500 per month. They said the limit won't increase if I pay money onto it (ie, pay it so its in credit then spend the money). We have the money in the company account, so don't need the credit, but currently I have no means to actually pay for the goods.
I need to buy around 2k of gear, from an online supplier. I can't do this with the limited company card due to the limit, and the company does not take cheques etc.
Can I pay for the stuff with my personal account switch card and then pay my self back right away with a company cheque, logging the online shops invoice with the VAT etc?
If I do this, can we still claim the VAT back?
We arn't VAT reg'd yet but will be in a few months, so I don't want to miss out on the VAT on this purchase.
Many Thanks,
Sam
Hey Sam,
Is this online company reputable- i hvaen't come across many companies that are unwilling to accept cheques so long as you are prepared to wait for them to clear. Alternatively why not make a BACE of CHAPs payment, former only takes three days and the latter is instantaneous. Of course if you buy something on a credit card you will have protection!
You can pay for it yourself and then pay yourself back, but you need to keep a pretty clear record of what you did and why, otherwise HMCE will count it as either income to you (which you didn't pay NICS/ Tax etc) or maybe as a BIK depending on what you are buying.
If you have the invoice made out to the company then you should have no problems when it comes to reclaiming the money.
Be careful about how long it takes to VAT reg something. IIRC you have 12 months for certain items and 36 months for other items- i am sure Eric will be along to answer this more accurately.
Cheers
Jim
Is this online company reputable- i hvaen't come across many companies that are unwilling to accept cheques so long as you are prepared to wait for them to clear. Alternatively why not make a BACE of CHAPs payment, former only takes three days and the latter is instantaneous. Of course if you buy something on a credit card you will have protection!
You can pay for it yourself and then pay yourself back, but you need to keep a pretty clear record of what you did and why, otherwise HMCE will count it as either income to you (which you didn't pay NICS/ Tax etc) or maybe as a BIK depending on what you are buying.
If you have the invoice made out to the company then you should have no problems when it comes to reclaiming the money.
Be careful about how long it takes to VAT reg something. IIRC you have 12 months for certain items and 36 months for other items- i am sure Eric will be along to answer this more accurately.
Cheers
Jim
VAT reg will be in 3-5 months.
Buying - computers for the company.
Company - Dabs and ebuyer (both fine, I use them all the time)
They may take cheques etc but I would rather not wait a week or two to get the stuff. I need to be able to buy things and this card issue is proving a real pain... they won't give me a switch/mastro on a limited company business account either (which was what I had as a sole trader).
Buying - computers for the company.
Company - Dabs and ebuyer (both fine, I use them all the time)
They may take cheques etc but I would rather not wait a week or two to get the stuff. I need to be able to buy things and this card issue is proving a real pain... they won't give me a switch/mastro on a limited company business account either (which was what I had as a sole trader).
Hmm, interesting that.
Natwest said they *dont* offer debit cards on company accounts, only these silly charge cards.
My accountant has just returned my call and confirmed the purchase question - he was in a meeting earlier, but we needed to order this stuff today hence the post.
Many Thanks for the advice.
Natwest said they *dont* offer debit cards on company accounts, only these silly charge cards.
My accountant has just returned my call and confirmed the purchase question - he was in a meeting earlier, but we needed to order this stuff today hence the post.
Many Thanks for the advice.
pugwash was pretty spot on with his comments.
If you do use your own personal resources to pay for company purchases and subsequently reimburse yourself out of the company bank account, you will NOT be liable to any personal Income Tax oir National Insurance liabilities provided:
you declare the value and nature of the remibursed expenses on the company's annual P11d "Benefits in Kind and Expenses" declaration form AND you ensure that you complete the relevant section of your personal Self Assessment tax return showing these reimbursed costs being paid to you and ALSO showing them as Expenses you incurred on behalf of your business. This should ensure that no taxes or NI are charged.
If you do use your own personal resources to pay for company purchases and subsequently reimburse yourself out of the company bank account, you will NOT be liable to any personal Income Tax oir National Insurance liabilities provided:
you declare the value and nature of the remibursed expenses on the company's annual P11d "Benefits in Kind and Expenses" declaration form AND you ensure that you complete the relevant section of your personal Self Assessment tax return showing these reimbursed costs being paid to you and ALSO showing them as Expenses you incurred on behalf of your business. This should ensure that no taxes or NI are charged.
Edited by Eric Mc on Wednesday 25th October 13:47
Hmm, thats another thing to add to my list of "why my local business managers are a bunch of t******"
Natwest seam to be great with personal accounts - quick, efficient service, 24/7 support line etc but business, they are a joke, when I call up Commercial Cards or the support dept they always put me through to my "business manager" who is ALWAYS busy, out, on a call, in a meeting... and never returns my calls either.
Natwest seam to be great with personal accounts - quick, efficient service, 24/7 support line etc but business, they are a joke, when I call up Commercial Cards or the support dept they always put me through to my "business manager" who is ALWAYS busy, out, on a call, in a meeting... and never returns my calls either.
sam you have entered the weird and wonderful world of commercial lending.
i have never found a good business bank- i have occasionally found good business managers who will help- but i usually leave that bank when they replace that manager- a good bank manager will help your business, and bad one can almost bankrupt you (or me, as the case was!)
Best thing i ever did was get big enough to go "corporate". At this level the bank want to keep you, and are usually pretty exposed so don't mess you around being petty.
i have never found a good business bank- i have occasionally found good business managers who will help- but i usually leave that bank when they replace that manager- a good bank manager will help your business, and bad one can almost bankrupt you (or me, as the case was!)
Best thing i ever did was get big enough to go "corporate". At this level the bank want to keep you, and are usually pretty exposed so don't mess you around being petty.
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