After contracting via an umbrella for a while, well several years to be exact, I today registered my Ltd. I have a new contract starting in two weeks. I'm told that it can take a couple to several weeks for the business bank account and card to be sent to me. So in the meantime, how do I account for expenses drawn from my personal account?
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Contracting without bank card/account
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Originally posted by Scotchpie View PostAfter contracting via an umbrella for a while, well several years to be exact, I today registered my Ltd. I have a new contract starting in two weeks. I'm told that it can take a couple to several weeks for the business bank account and card to be sent to me. So in the meantime, how do I account for expenses drawn from my personal account? -
Credit directors loan account for stuff you've bought in the company's behalf (try and get invoices in company name). There should be no P11D implications for these things. Office equipment, stationary, that sort of thing.
Credit your expenses account for out of pocket expenses like travel, subsistence etc. and reimburse yourself later. They will go down on your P11D at the end of the year.Comment
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Directors Loan Account, VAT and Dispensation
Originally posted by Scotchpie View PostAfter contracting via an umbrella for a while, well several years to be exact, I today registered my Ltd. I have a new contract starting in two weeks. I'm told that it can take a couple to several weeks for the business bank account and card to be sent to me. So in the meantime, how do I account for expenses drawn from my personal account?
If the company will be VAT registered (assuming you're not on a 'Flat Rate Scheme' for VAT purposes), then you can also claim the VAT back providing you meet some of the conditions (the link to the respective HMRC VAT Guide is HM Revenue & Customs ).
Furthermore, I would suggest you also complete Form P11DX. This Form allows you to make reporting expenses to HMRC a lot easier, and allowing you to avoid submitting Form P11Dss going forward. A link to the respective Form is http://www.hmrc.gov.uk/forms/p11dx.pdf . Note some HMRC Tax Offices are showing a bit of resistance to issuing dispensation agreements to 'One man service companies', in this event I suggest you make reference to HMRC Manual EIM30059 (link: EIM30059 - Dispensations: checking and authorisation of expenses payments ) and you should be fine.
Hope this helps.
All the best.Lighthouse Chartered Accountants and Tax Advisors
Providing a solution to all of your contracting, business and tax needs.
theAccountant BEng (Hons) ACA MIETComment
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Thanks for the advice everyone. I've been reading up a little over the weekend about bookkeeping so understand the Director's Loan account.Comment
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Pleasure.Lighthouse Chartered Accountants and Tax Advisors
Providing a solution to all of your contracting, business and tax needs.
theAccountant BEng (Hons) ACA MIETComment
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