VAT

[Leslie66]

Can expenses such as mobile expenses vat can be claimed through ltd company vat return if the invoice is in the personal name even if the whole amount is being reimbursed to the employee. And for the other directors?

 

[David Griffiths]

No the company cannot claim VAT if the contract is in the personal name of the employee.

And if the company reimburses the whole sum then there will be a benefit in kind assessable on the employee for income tax purposes

 

[Leslie66]

Thanks, I thought as much. So when invoice is entered into Quickbooks - It should be 'not applicable for vat' ?

 

[David Griffiths]

I can't see why you would enter the invoice into Quickbooks. It's not a company expense.

 

[Leslie66]

Its paid from the company bank account. Otherwise it will not reconcile?

 

[Caspar]

What you would normally do here is to get the employee to photopy their invoice for their phone and highlight those calls that where for business use. Only if the employee has another phone they use for personal calls and make no personal calls on this other phone, they can claim the full amount as an expense to her employer. You would normally create an expense form for them including the Directors to complete weekly/monthly, and you would pay them back for their claim. However, you should not be doing it the way you currently are, which is paying the employees invoice directly to the company it came from, as it is not your invoice to claim.
You would then simply enter a bank payment to the code that the expense claim relates to. There is no invoice to enter, unless you want to keep tab and set a 'supplier' up on you system (one for each person, by way of memorandum accounts, so that you can keep a tab of whats been claimed and what is owed to each person as 'A Smith Expenses' etc.).

 

[Leslie66]

Yes that is what we have done - set up mobile company as supplier then pay back to employee from company bank account but not include the vat to be reclaimed.




Can I claim the expenses for one of the directors of the company when they went on a trip to europe (business convention)?

The expenses include: flights, accommodation, food, taxis, train, car hire.

There was also another trip to a different country to visit clients with similar expenses.

Also can the vat be claimed on these?

Most of the expenses were paid out the business account in advance (the more expensive ones) and the rest from petty cash/cash when in that country.

 

[Caspar]

You are partially right, if you read my reply again, you will see that you can’t set the mobile company up as a supplier, as it is not your supply. You need to get the employee to complete an expenses form and put the amount on there with a copy of the bill, and only if the whole bill relates to company calls, can she/he claim the full bill from you, otherwise, she/he would have to highlight the calls made and total them up only for the claim. You can set up a supplier as being the expenses for that employee to help you keep track of what you owe and what you have paid out, but this is more as a memorandum account as isn’t a real supplier.

If the Director travels purely on a business convention in Europe and the trip was ‘wholly and exclusively’ for business use. Then you can claim for everything. Although there is no VAT on flights. You will need all the receipts relating to this.

Caspar

 

[Leslie66]

Thanks for your reply.

I understand what your saying and will do it that way.

Yes I am aware there is no vat on flights and both trips were for solely business so flights & accommodation can be paid through the business as travel costs etc. The smaller expenses come from the petty cash. Can the cost of eating out on the trip be reclaimed?

 

[weebly_one]

This is quite a useful page to use for reference for your questions

http://www.hmrc.gov.uk/payerti/exb/a-z/index.htm

 

[Caspar]

Yes, you can claim for his eating and beverages whilst away on a business trip.