An associate TV producer, is given floats for the expenses incurred on behalf of the production company, and receives additional sums on submission of expense claims, and until now has been submitting the original receipts to the company.
She is paid and treated as self-employed, and I have seen that the production company codes these expense claims under their accounting codes, even accounting for the VAT (my client is not VAT registered).
Should I show the total of the expenses reimbursed as cost of sales?
These reimbursments include travel costs for her and others, her phone, and other supplies. Some of the expenditure is for entertaining, but may I assume that as the production company deducts it as disallowed in their tax comp?
Sally
Related resources
Replies (1)
Please login or register to join the discussion.
Expenses / floats
Hi Sally,
I'm assuming you're preparing the accounts for the producer, not the production company.
The floats are basically loans, and if you produce a balance sheet for your client, these should be shown as credit balances. If you only produce an income & expenditure account, do not enter the floats (but keep track of them in your own papers).
Again, the reimbursed expenses are not really the expenses of your client, but of the TV company. The correct way to treat them is to debit your client's original outlays of "claimable expenses" to a "loan" account, and to credit the reimbursement cheques to this account.
Any amounts of expenditure (which would normally be allowed as business expenses) which are incurred by your client but NOT refunded by the contractor/customer (eg, disputed), can be claimed as expenses on your client's P&L or I&E a/c.
I hope that is of some help.