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.