loaning self moeny for start up

[007helen]

During start up process I've had to fund certain aspects of my business myself. Ie paying for some services on my own cash card as I didnt yet have one for the business. I am the only director and was employed prior to deciding to to ltd (going ltd has involved the costs). Can i take these costs back from my ltd company as I've effectively lent it money or is it more complex than that. Its not huge amounts.
Thanks in advance

 

[TechFox]

I think you can count the money you invested personally as your 'Directors account' and claim it back, but you should check with your accountant.

 

[Joyous]

Hi Helen

As TechFox suggest the easiest thing to do would be to put the amounts through the director's loan account (DLA). The DLA is just an account that records how much the company owes the director as a result of him/her introducing assets to the company or paying company expenses personally.

Regards

Joy

 

[KM-Tiger]

. Can i take these costs back from my ltd company as I've effectively lent it money or is it more complex than that. Its not huge amounts.

Whether its large or small, as Joyous points out do this through a Director's Loan Account. The important thing to understand about this is that you can draw back this money (assuming the company has it!) free of all tax. There aren't many free lunches in business, but this is one of them!

So every penny you spend, do so from the DLA.

You might also do well to keep VAT receipts/invoices for everything. I can't remember the exact rules as it's ages since I started up, but if you do register for VAT, you might be able to reclaim some of the VAT on your startup costs retrospectively.

 

[webit]

R & D can be reclaimed as a startup cost.

 

[Romperstomper]

When the Director's Loans are used, in the Balance Sheet are these recorded as an element within the "Creditors: Amounts falling due within one year?" as the Director is effectively another creditor waiting for his money?

thanks

 

[Alpha]

When the Director's Loans are used, in the Balance Sheet are these recorded as an element within the "Creditors: Amounts falling due within one year?" as the Director is effectively another creditor waiting for his money?

Yes that is basically the case. The companys indebtedness is recorded under the general heading of creditors due within one year.

 

[Joyous]

Assuming the account has a credit balance on it then "yes" is your answer as the amount is ordinarily repayable on demand.

Regards

Joy

PS - just has a look at your site, you've got some wicked stuff. I wish I'd seen it a year ago as my youngest has just outgrown the sizes you have on there. The baby on the home page looked a bit shocked though, what did you do to him?