Sole Trader - Relative Buying Stock

bring_2

Hi,

I am a sole trader and my boyfriend is planning on buying the stock initially on their 0% credit card. Will I be able to claim these costs as allowable expenses at year end? or will this not be permitted because I personally didnt incur the costs?

Many Thanks

steve1980

Unless your partner is part of the business (you'd then be a partnership) then no.

Pennywise

Assuming that you will pay him back at some point, then yes, of course it's allowable. Accounts and tax returns aren't based on when the money is paid/received - they're on the accruals and matching concepts.

So in effect, you're buying the stuff off your bf on credit, so you owe him for the stock, so it's a "creditor" in your books. Just remember not to include it again as a cost in a future year when you come to actually pay him the money, as then you'd have duplicated the expense.

steve1980

I read it that the boyfriend was using his card to buy the stock with no mention of paying him back.

CKhalvashi

The best way to go about this is to have him as a creditor on the books, as post 3 states, as then it’s an allowable expense (although, of course he won’t be VAT registered and any profit will be subject to letting HMRC know, speak with an accountant before doing this regularly, as it can turn into a grey area.)

If you’re running as a Ltd, expenses can be put onto personal credit cards and claimed back (including Avios miles if you have one), and I’m a regular for doing so, again with accountant registering this with HMRC.

CK