Hi
We are a UK company who also has a company set up in Mauritius. Both company's transactions are entered in the UK through Sage, but are mainly coded to either specific UK nominals or specific Mauritius nominals.
Where some of the Directors of the UK company have travelled to Mauritius, these costs have been allocated to the UK company, in Travel overseas. Is this correct?
I am preparing the Mauritius accounts and need to know whether any of these costs should be taken up the Mauritius company or whether they are ok to be reported in the UK accounts.
Some of the travel was to set up the company in Mauritius, so I assume these should be allocated to Mauritius. Other costs would be flights to Mauritius to carry out interviews for new employees.
Any help would be great!
Thanks
Replies (2)
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If the costs have been incurred by the UK company and not re-charged to the Mauritian company then there is nothing to account for in the Mauritian company.
If you have to ask this question it may be that you are not maintaining a proper distinction between the two companies in Sage.
If you are asking whether the UK company should re-charge travel costs to the Mauritian company that is a commercial / management question not an accounting question. The management decision on whether to do so might usefully be informed by advice from the company's tax advisers - the cost might be allowable for tax if incurred by one company but not if incurred by the other for example. Or the effective rate at which tax relief is given might be different between the two companies.