I have a client where there is one sole director and she is the only shareholder too. Her husband also works for the company but put through all his car expenses including petrol, insurance, repairs, MOT etc. The Car is owned by the wife (he says)
The husband's payroll is run but never takes his salary and is currently entered in the Net Pay Control Account. He wants the personal expenses to be offset against the Net pay control account but shouldn't this be taxed through the payroll or can this be adjusted through the directors loan account as the wife owns the car.
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Seems reasonable
He may not be a director, but he can have a loan account. Credit his net pay and debit his personal expenses to it.
It will only be taxed when he gets it. However sticking it to his loan account will suffice too as will basic entries recognising his remuneration. Calculate the tax separately and only credit his loan account with the net pay. If the personal expenses are paid for from his net pay there is no benefit to take account of (although potentially some paperwork).
What about VAT?
If VAT is being claimed on his car expenses this must be repaid to HMRC and debited to his loan account of course.
You mean he has already been paid an element of private expenses and wishes to 'repay' them by way of offsetting the salary he's due.
Or that ge hasnt actually received reimbursement yet - as the payroll never gets paid to him