Ownership quandary

[Onthebrightside]

Any opinions gratefully received and I'll try to be concise.

• Job came up in Peru and sub-contractor based in US needed a camera to complete it.
• The UK company agreed that rather than Company continually hiring one, a camera should be purchased.
• Sub-con then bought c.2K camera on Amazon in US in his own name.
• Sub-con then submitted expenses (which inc. camera and other things) and company paid it.

Company is only now aware it's the sub-con, not the UK company, that owns the camera. Sub-con is nice chap and offered to 'sell' camera to the company for £1, so company have ownership.

My questions:

1. Is it OK to do that?
2. How can it be account for as a non-current asset of 2k if the company only paid a £1 for it?

Before people start to attack - I'm not an accountant and not giving anyone financial advice, the client has his own accountant and he'll no doubt deal with it, I'm just interested in what happens in cases such as these and peoples opinions or perhaps previous experience?

 

[Joyous]

Hasn't the UK company paid £2001 for the camera? £2000 on the expense claim and £1 for the transfer of ownership?

 

[Paul Kelly ICHYB]

Company is only now aware it's the sub-con

Why is it only aware now?
What was the written agreement?
Why does the subby want to sell it to the company - why cant he just send it to them?

 

[Joyous]

why cant he just send it to them?

Isn't he using it out in Peru?

 

[Paul Kelly ICHYB]

And?

 

[Onthebrightside]

Why is it only aware now?
What was the written agreement?
Why does the subby want to sell it to the company - why cant he just send it to them?

LOL - all good questions:

Only aware now because I raised it with them.
There wasn't a written agreement the owner and subby know each other.
The subby is a good man and realises it should be in company ownership.
Company want to put it on their hardware list because they think the accountant shall be able to use it for positive taxation.

 

[Onthebrightside]

Isn't he using it out in Peru?

This is correct, not only is he using it in Peru but he's likely to use it on other projects for the company, he's the person the company normally send to photograph and do LiDAR on the site so whilst it should be with him in the US (or wherever he goes) it should be owned by the company to be otherwise there's problems with accountancy, insurance etc.

 

[Paul Kelly ICHYB]

So just declare it as their property!

 

[Onthebrightside]

So just declare it as their property!

Not with you Paul, could you explain more please.

 

[Paul Kelly ICHYB]

Maybe I think about things too simply.

A third party was pre-paid to purchase something for the business, therefore, it is business property.

Does the subby dispute this?

 

[BusterBloodvessel]

They've already paid for it haven't they? They own it?

Sub-con showed them a receipt for £2000. "This is for that camera". Company paid said £2000, on sight of that receipt, they just paid it to the sub-con, not directly to the camera supplier.

Unless I'm missing something, they do own it and there's no question or issue here.

 

[Onthebrightside]

They've already paid for it haven't they? They own it?

Sub-con showed them a receipt for £2000. "This is for that camera". Company paid said £2000, on sight of that receipt, they just paid it to the sub-con, not directly to the camera supplier.

Unless I'm missing something, they do own it and there's no question or issue here.

So subcontractor submitted an invoice for about 5k of expenses in total but no breakdown, so the invoice didn't actually say 'camera' on it anywhere. Amazon receipt is in subbys name.

 

[Paul Kelly ICHYB]

subcontractor submitted an invoice for about 5k of expenses in total but no breakdown

So the company is a twat for paying expenses blindly - how much of it was for big meals and fine wines?

 

[Newchodge]

So subcontractor submitted an invoice for about 5k of expenses in total but no breakdown, so the invoice didn't actually say 'camera' on it anywhere. Amazon receipt is in subbys name.

Get the subby to send the company the receipt for the camera. Tie that in with the expenses payment and you have the company owning it.

Separately, they really need to get itemised expense claims! Currently there is no proof that the company paid anything for it.

 

[Onthebrightside]

Get the subby to send the company the receipt for the camera. Tie that in with the expenses payment and you have the company owning it.

Separately, they really need to get itemised expense claims! Currently there is no proof that the company paid anything for it.

Thank you, much appreciated.