Hi,
I have a client who is Contractor working through his Limited Company.
He has recently paid for significant expenses out of his own pocket and has asked his client to reimburse them back into his Limited company.
Should he get the expenses paid directly back to himself and thus avoid going through his Limited company or should he invoice the client for expenses at the same time as invoicing for his services?
What are the advantages and disadvantages of the two approaches?
Thanks
Louise
Replies (8)
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Provided the company reimburses him for the expenditure in question then end result is the same in each case.
Or...
...he could use his directors loan account, particularly if it's as big as you suggest.
Reimbursement
...he could use his directors loan account, particularly if it's as big as you suggest.
How is using the DLA not reimbursement, and what information is there in the question to show how big the balance on it is?
Am I being cross examined?
...he could use his directors loan account, particularly if it's as big as you suggest.
How is using the DLA not reimbursement, and what information is there in the question to show how big the balance on it is?
I didn't say it wasn't a reimbursement, the "big as you suggest" was in reference to the "significant" expenses. The OP has some uncertainty on the approach to take, as per the description of the replies I made a technical "comment" - AKA a suggestion.
Invoice client company
I may have misunderstood the question but shouldn't the Ltd co invoice the client company for recharged expenses in any case?
Agree 100%
Anything else is confusing. I wouldn't recommend breaking the (illusion of) supplier and client relationship and act like an employee. Who knows where that could lead.I may have misunderstood the question but shouldn't the Ltd co invoice the client company for recharged expenses in any case?
I agree too!
Anything else is confusing. I wouldn't recommend breaking the (illusion) of supplier and client relationship and act like an employee. Who knows where that could lead.I may have misunderstood the question but shouldn't the Ltd co invoice the client company for recharged expenses in any case?
Absolutely. Director incurs expense and submits expense claim to limited company, who reimburse him.
Limited company then invoice client for agreed expenses (plus VAT of course if VAT-registered).
Anything else would be very confusing, and would make the director appear to be an employee of the end-client.