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Director's personal expenses paid for by company

Director's personal expenses paid for by company

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Good afternoon

A Ltd company providing architectural services uses a subcontractor (non -VAT registered) to submit drawings and planning applications. When doing the books I noticed 2 of their purchase invoices relate to a job for one of the director's house. These were paid for by the company's current account. I raised this with the director and they now want to put this right.

One option would be to treat this as remuneration - however we do not yet have a PAYE scheme in place.

Another option would be the Ltd company raises an invoice to the director - but as they are VAT registered they would be charged 20% on top.

Third and preferred option would be to debit the director's loan account (which would be largely covered by the loan standing currently at over £5,000 in credit) however I am unsure whether this should still be disclosed as a benefit in kind.

I would appreciate your input, especially on the last option.

Thank you

Replies (2)

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By Howard Marks
04th Oct 2014 19:45

Loan repayment
If the DLA is in credit it's obviously a repayment of the loan. No BIK.

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By Chipette
05th Oct 2014 09:22

Thank you

I was overcomplicating things! 

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