Contractors' Questions: How should my 'Ltd' pay me back?

Contractor's Question: I have paid my limited company's insurance – Professional Indemnity and Public Liability, from my personal bank account. But now I want to move them to my company's expenses account. How should I do that, legally and effectively?

I have also paid from my personal bank account for some training materials and certification, costing around £500, which I want to switch to my company's expenses too. What do I need to record such transactions? I don't have an accountant and am doing all the accounting myself.

Expert's Answer: There are two ways to include the expenditure in your company accounts. The clearest way is for the company to pay you for the expenses.

Alternatively, you could create a director's loan that is repaid to you at a later date. There may be some minor complications with VAT, assuming your company can reclaim the VAT.

Essentially, you should ensure that invoices supporting any VAT-able items over £250 are made out in the company's name rather than to you personally.

Expenses reimbursed to you are also reportable on a P11D at the end of the tax year, although they should not affect your personal tax liability when you do your tax return.

The expert was Paul Spindler, partner within the technology group at chartered accountants Kingston Smith LLP.