Filing Expenses - not drawn any salary yet

[Ted]

I decided to let the last thread die down.

My accountant is uncontactable at the minute - I think health reasons. I'm considering changing as he is very hard to get in contact with, but that is another issue.


I know that my first set of VAT returns are due soon and I've got some minor questions which might be answerable from here.

1. My company has been running since June. I've not as yet drawn down any salary, but intend to soon. Is there any issue in regards to how long you leave this until starting?
2. Should I be filing travel expenses into my company monthly as an expense?
3. Should I be filing any expenses now or should they only be done when I start drawing down a salary? I'm wondering if doing this incorrectly will affect my tax bill.

The accountant said he would get back to me with a salary figure, but as yet has not done so.

I appreciate that people like to takes threads in a tangent, but can I ask please for just answers on the questions above.


Thanks.

[Ebenezer]

I decided to let the last thread die down.

1. My company has been running since June. I've not as yet drawn down any salary, but intend to soon. Is there any issue in regards to how long you leave this until starting?
2. Should I be filing travel expenses into my company monthly as an expense?
3. Should I be filing any expenses now or should they only be done when I start drawing down a salary? I'm wondering if doing this incorrectly will affect my tax bill.

1. When I started, I didn't pay any salary until the following tax year. This was because I had already earned quite a bit in my last permanent job and paid associated tax and NI.

2. Yes, you should file expenses monthly, or preferably weekly or even daily. This will avoid you having to do what I am doing today, which is typing in four months' worth of expenses on what is potentially the last sunny weekend of the year.

3. There isn't any relationship between salary and expenses, as long as all the expenses pass the "wholly and exclusively" test. Out of abundant caution, I do try to make sure my expenses are all up to date and paid before paying a dividend, but I'm not sure this is strictly necessary. After all, when I was employed by a PLC they never asked me whether my expenses were up to date before paying a dividend to their shareholders!

[Lance]

I know that my first set of VAT returns are due soon and I've got some minor questions which might be answerable from here.

1. My company has been running since June. I've not as yet drawn down any salary, but intend to soon. Is there any issue in regards to how long you leave this until starting?
2. Should I be filing travel expenses into my company monthly as an expense?
3. Should I be filing any expenses now or should they only be done when I start drawing down a salary? I'm wondering if doing this incorrectly will affect my tax bill.

The accountant said he would get back to me with a salary figure, but as yet has not done so.

I appreciate that people like to takes threads in a tangent, but can I ask please for just answers on the questions above.

1 - No issue whatsoever. Certainly don't sweat it.
2 - entirely up to you. I do mine weekly but that's because I hate a backlog of filing to do, and also it's best to get mileage done while fresh in the mind.
3 - again it's entirely up to you. Although if you're intending claiming VAT back on any expenses (unlikely if you're on FRS) you ought to get them processed before the accountant does your VAT return.

[northernladuk]

I'd question what you are missing because you don't know and the accountant isn't around to guide you.

I'd personally be looking to get a new accountant as a priority. It's not acceptable to have an accountant and having to ask fairly basic questions at a key time such as this.

[Jessica@WhiteFieldTax]

1 - no legal requirements to do so. Only imperative if you are not using allowances and/or not getting credit for minimum NI viz making the year contribute to pension entitlement\

2 - probably best to start now, but it's not imperative

3 - no link between the two so long as all the expenses are propely deductible, they probably are.

Quick answers, you neeed to flesh them out with your accountant. Every accountant has their own preferred way of doing things.

[adubya]

Ditch the accountant and get a new one who uses Freeagent, makes life so much easier IMO. You can easily "file" expenses as you incur them, I use the Freeagent phone app and log the expense (with a scan) pretty much straight away (or on the train). No monthly marathon accounting sessions, it's just easy.

[DSF70]

I use Danbro, who provide FreeAgent free as part of their costs. Been really impressed with Danbro, plus FreeAgent is 1) a great dashboard and 2) easy to use.