Expenses Via Limited Co - Simple (I Hope) Question

[RealPolitik]

I've been contracting via my limited co. for a couple of months now, and am the only employee. I'm a novice to the workings of a limited company.

I have a question regarding expenses - my current contract requires me to drive to meetings and I am able to claim a mileage allowance for this via my agency timesheets, which is obviously paid into my limited co. bank account.

I as employee then claim this amount back from the limited company (as I have paid for the fuel from my personal bank account), sticking the amount reimbursed into my dividend spreadsheet, and document it with an expenses claim form.

My question (and it may be a silly one) is whether or not I should instead be paying for the fuel used on such journeys from the limited co. account (and returning a VAT receipt for it to my accountant), rather than paying and being reimbursed as employee?


Thanks in advance.

[kingcook]

I'd *guess* that the fact that your limited company is being paid to allow it's employees (you) to travel is a separate issue to your mileage payments. This is extra income for your ltd co.

I'd say just claim the 45p/mile from your employer (your ltd co) i.e. carry on paying out of your own pocket and being reimbursed.

Someone else will probably be along in a minute with a better answer

[Greg@CapitalCity]

Kingcook has got it right.

(1) Yes, claim your mileage allowance via your agency, which will be a little extra income for your business;
(2) Also submit an expense claim to your business at 45p per mile travelled. Don't get reimbursed for fuel and don't get the company to pay for the fuel. The idea is the 45p mileage allowance you can claim will cover your business motoring fuel costs, and other associated vehicle running costs (like wear and tear, maintenance, insurance etc). If you travel over 10,000 in the tax year, the mileage allowance you can claim drops to 25p per mile.

[RealPolitik]

Thanks for the prompt responses, that makes perfect sense.

[xoggoth]

Hey, its gone up to 45p this year. Didn't know that!

[northernladuk]

Hey, its gone up to 45p this year. Didn't know that!

Is that because you are too busy trying to get yourself a few Russian brides and set up divi payments for them?

[markskinnerconsulting]

Question re: expenses

Kingcook has got it right.

(1) Yes, claim your mileage allowance via your agency, which will be a little extra income for your business;
(2) Also submit an expense claim to your business at 45p per mile travelled. Don't get reimbursed for fuel and don't get the company to pay for the fuel. The idea is the 45p mileage allowance you can claim will cover your business motoring fuel costs, and other associated vehicle running costs (like wear and tear, maintenance, insurance etc). If you travel over 10,000 in the tax year, the mileage allowance you can claim drops to 25p per mile.

Hi, just saw this and really interested as I've just started contracting (2 weeks ago) and I have a follow up question:

I'll be invoicing my agency twice a month at the end of every month - one for my day rate and another separate invoice for expenses e.g. travelling each month, hotels etc. Should I have my expenses paid into my company account as well as my day rate or should I have expenses paid into my personal account? Am I right in thinking that I'll be pushing my corporation tax if my expenses reimbursed by my agency are paid into my business bank account?

Thanks in advance for your help!

Mark

[Sockpuppet]

Hi, just saw this and really interested as I've just started contracting (2 weeks ago) and I have a follow up question:

I'll be invoicing my agency twice a month at the end of every month - one for my day rate and another separate invoice for expenses e.g. travelling each month, hotels etc. Should I have my expenses paid into my company account as well as my day rate or should I have expenses paid into my personal account? Am I right in thinking that I'll be pushing my corporation tax if my expenses reimbursed by my agency are paid into my business bank account?

Thanks in advance for your help!

Mark

COMPANY ACCOUNT!

Don't ever ever ever ever ever get any money paid into your personal account by an agency. That'd be like hector's (read: HMRC) wet dream.


You won't push up your corp tax as say you pay out £1000 of expenses. You claim this £1000 from the agency. They pay you and you either:

a) Have paid for all the expenses on a Company Credit Card. or
b) Paid for yourself for which you've put in an expense form for £1000.

So to recap. £1000 in, £1000 out. No increase in profit or corp tax.

[stek]

Hi, just saw this and really interested as I've just started contracting (2 weeks ago) and I have a follow up question:

I'll be invoicing my agency twice a month at the end of every month - one for my day rate and another separate invoice for expenses e.g. travelling each month, hotels etc. Should I have my expenses paid into my company account as well as my day rate or should I have expenses paid into my personal account? Am I right in thinking that I'll be pushing my corporation tax if my expenses reimbursed by my agency are paid into my business bank account?

Thanks in advance for your help!

Mark

Just a minute. Travelling to and from where? From home to site? If so these expenses are yours, nothing to do with the agency.

[markskinnerconsulting]

COMPANY ACCOUNT!

Don't ever ever ever ever ever get any money paid into your personal account by an agency. That'd be like hector's (read: HMRC) wet dream.


You won't push up your corp tax as say you pay out £1000 of expenses. You claim this £1000 from the agency. They pay you and you either:

a) Have paid for all the expenses on a Company Credit Card. or
b) Paid for yourself for which you've put in an expense form for £1000.

So to recap. £1000 in, £1000 out. No increase in profit or corp tax.

Thanks, Sockpuppet, I really appreciate your help

One more question (for today...sure i'll think of more later!) do you think I should pay for fuel on my company commercial (credit) card or should I keep fuel separate and pay for fuel out of personal money and then claim the 12p a mile from the agency and then invoice my ltd company for 45p a mile?

Not sure what would work best. I plan to keep all my fuel receipts just in case anyway but just want things to be as easy and tax/money efficient as possible.

Thanks again,

Mark