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Accounts prep - related party transactions

Accounts prep - related party transactions

Hi, I was wondering whether the following would need to be recorded as a RPT in the books of a small company if the Director purchased stock with his personal credit card, only to get reimbursed at a later stage by the business. This was before the business issued cards to Directors/employees. Thanks.

PS the company is reporting under the FRSSE.


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08th Jun 2012 12:00

from memory I think that only material transactions have to be disclosed under the FRSSE.

I would suggest that if only a few transactions of relative low value then no need to disclose. 

That old chectnut as to what is material!


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08th Jun 2012 12:20

Related Party Transaction Disclosure - Disclosure

This comes under receiving financial support from a related party i.e director. FRSSE 2008 on related parties states that 'such material transactions should be disclosed'. Materialilty shall be judged in terms of its significance to the reporting entity.

Will also need to be disclose re-imbursed expenses on year end P11D if no dispensation is in place.


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By nutwood
08th Jun 2012 13:18

Isn't that a little pedantic?

Unless there was an extended period between the director using his own resources to purchase stock and the reimbursement, in which case you would include the transactions in the director's loan account and if appropriate include disclosure of the balance at the date of the accounts.

As to P11D the following is what the Expenses and Payments Tax Guide 480(2012) says:

Purchases on employer’s behalf

Businesses are often run in such a way that employees make payments on their employer’s behalf.

For example, an employee may buy stamps, stationery and items of equipment for the employer

and be reimbursed the costs incurred from petty cash or by cheque. Such transactions are not

providing the employee with either earnings or expenses because the employee has received no

money of his own. Accordingly such reimbursements do not feature on the P11D.

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to lme
08th Jun 2012 16:07

Agree with nutwood.

In the past I have been pedantic, sometimes including such reimbursements on P11D, and now I am convinced it was a waste of time.


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