Claimin Expenses as a LTD Company

santiagobravo

Hi,

Ive recently opened a LTD company and i need to purchase some hardware. I am unsure as to how i can reclaim part of this expense. Can anyone advise how this can be done? Can i also do this for business travel?

Thanks

S.

basscadette

You don't reclaim it at all, you just don't pay tax on it!

Keep the receipts for all expenses. In your accounts, subtract your expenses from your income. Pay tax on the profit (what you have left after expenses).

Or better still, if you don't know this perhaps you should speak to an accountant ASAP, or do some quick reading, as this is basic business accounting and you should really know this. You can get into a right old mess with HMRC if you do anything wrong.

jhp

The Tax Forum is here: http://forums.moneysavingexpert.com/forumdisplay.php?f=22

and the Small Biz Forum is here : http://forums.moneysavingexpert.com/forumdisplay.php?f=27 lots of useful start up info.:D

Hooloovoo

santiagobravo wrote: »

I am unsure as to how i can reclaim part of this expense.

Who are you planning on reclaiming the money from?

InsideInsurance

Not sure if you are talking about you reclaiming personal expenses from your company or your company reclaiming expenses from a client?

If it is the former it is straight forward, you make a cash claim against the company and ensure you keep the receipts etc. The company when doing its return will then deduct the valid expenses from its income as a cost.

If it is the later then it will depend on your contractual arrangements with its clients

santiagobravo

ok, so i dont pay tax on my purchases such as PC, printer, business travel, etc.

basscadette wrote: »

Keep the receipts for all expenses. In your accounts, subtract your expenses from your income. Pay tax on the profit (what you have left after expenses).

Im not paying myself a wage. I plan to take this out as a dividend. Do you mean to subtract the expenses from my dividend amount?

basscadette

santiagobravo wrote: »

ok, so i dont pay tax on my purchases such as PC, printer, business travel, etc.



Im not paying myself a wage. I plan to take this out as a dividend. Do you mean to subtract the expenses from my dividend amount?

No, not quite from your dividend. And you should draw a basic wage from the co before taking dividends - there are significant tax/NI benefits unless you are employed elsewhere and already use up your tax free allowance.

So,simpified, you add up everything you earn in the year in sales.

You subtract all expenses - including your software expenses.

This leaves you with your gross profit, which is taxed accordingly (20% corp tax). Then you are left with your post tax profit/dividend.

If you want the cost of the software returned, i.e. you paid for it out of your own pocket on behalf of the business, this is treated as a loan from you to the company and you can take the full amount out. It is then an expense to the business, as above, and you can have the full amount back in your pocket. You need to show this in the accounts though.

If you're not working elsewhere an not using up your tax free allowance, do consider taking the nominal wage from the company nad take the rest as dividends. It is one of the biggest advantages to going ltd in the first place.

santiagobravo

ah, ok from a wage. I am already working full time for a company and want to do this as a side business.

Can i still take advantage of this even though im not taking a wage?

basscadette

santiagobravo wrote: »

ah, ok from a wage. I am already working full time for a company and want to do this as a side business.

Can i still take advantage of this even though im not taking a wage?

No, since you are working too you are doing the right thing with dividend only. Only if the business is your sole employment would you do otherwise.