I just started a small trading business, importing goods from Asia and selling them in the UK. I'm self-employed at the moment, though my boyfriend is helping me and we'll look to incorporate when the business concept is proven to work.
I pay for most expenses with a separate bank card to keep it simple.
We need to fly to Asia to visit our suppliers and my boyfriend paid for the flights and hotels using his card.
Is it possible for him to claim that back as a business expense? Should I pay him back using the "company card" and then claim it back as a business expense?
Many thanks.
Replies (16)
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Are the payments made by your boyfriend loans to you, or gifts?
If they are loans to.you then the expenses are yours. If they are gifts they are his expenses but he can't claim any relief for them as business expenses as he has no business - only you have.
On that basis
On the basis of your questions, I would strongly advise you appoint an accountant. These are very basic questions and I suspect your import business is, or will become, quite complex
Thanks for your reply. They could be considered loans. Do I need to pay him from the designated "company account"? Do I need to do it straight away, within the tax year, or just keep track of them and pay at some point? Does he need to charge me interest?
Loans
Thanks for your reply. They could be considered loans. Do I need to pay him from the designated "company account"? Do I need to do it straight away, within the tax year, or just keep track of them and pay at some point? Does he need to charge me interest?
Not sure what you mean by "could be considered loans". Either they are loans or they are not. The first thing you need to do is decide whether you are going to pay him back or not. No-one else can help you with that. When you have decided you can move on.
If it is a loan you can pay him back whenever you and he agree. Whether he is going to charge you interest is for you and him to agree. He is perfectly at liberty to make the loan interest free if he wants. You can pay him back out of whichever account is most convenient for you at the time.
Have you got an accountant/tax adviser? With your business being cross border, I'd certainly get one (preferably with relevant experience).
Be careful about claiming the cost of his ticket as a business expense of your sole trade. You really should get professional advice.
Exactly
Be careful about claiming the cost of his ticket as a business expense of your sole trade. You really should get professional advice.
Was thinking the same thing
Agree
Be careful about claiming the cost of his ticket as a business expense of your sole trade. You really should get professional advice.
Nail on head!
Is there also the possibility that HMRC would seek to disallow the girlfriends ticket, or at least a proportion of it?
Due to the fact that the boyfriends trip was clearly not a business trip - he is not in business, as mentioned above - and therefore, as he went along, an element of the girlfriends trip must also have been to 'holiday' with the boyfriend?
So does he have an employment contract?
Or is he an 'ad-hoc consultant' that is not employed?
You can't be
A Director of a sole trade business.
I would suggest disallowing the cost of the boyfriends ticket.
I disagree with the above. To the extent that your boyfriend attends and participates in business meetings and other business activities with you on your trip to visit overseas suppliers, the cost of his travel is just as much a business expense as yours is.