Business expense not my card

Tazbo

I am starting up a small business and a friend of mine is flying out to Dubai next week. The camera in Duty free is £100 cheaper than the highstreet. If I transfer the money to his account and he was to buy the camera from his card, can I still claim that back as a business expense? I am not 100% sure on how to put that through the books as an end of year expense. He can't use my card as they check boarding cards so it will have to purchased under is name.

Thanks

InsideInsurance

Remember to factor in the VAT and Import Duty when bringing it back in the country assuming you are wanting to do things legally. Warranties may also not be valid internationally.

You would simply give him cash and put it through as an expense that you paid and use the receipt as evidence or get your friend to also write you a receipt assuming that the retailers receipt has your friends name on it and keep both

Tazbo

Hi,

His is buying it through Dixons Travel in the UK Airport before his flight and they post it out directly from there.

InsideInsurance

You may want to check as you are going way beyond my knowledge.

Certainly if he was buying it whilst flying within the EU then he may get "duty free prices" but it is not actually duty free, Dixons just absorb the cost. Given he is flying outside of the EU then it can be truly duty free and I'd be surprised if they are willing to absorb the cost of VAT and Duty when they dont legal have to.

Looking at their website they also mention nothing about them posting it to you but that you have to collect in person and fly with it.

Brassedoff

Your Accountsnt will say no. The HMRC does not allow these creditable additions as part of the portion of your input tax.

Or putting it into plain English. The item has to be purchased for the business and in the company name. You may as well forget claiming the VAT on it. AND, and its a big and, the HMRC will only allow it if it is "standard" business equipment within your business. i.e. if you run a Pub, the HMRC would say its not necessary equipment for it.

The test is wholly and exclusively for the purpose of the business. For the tax purpose you do not need to prove the item was necessary for the purpose of the business.

As long as the equipment is wholly and exclusively for the purpose of the business then it is allowed.

However if you are a limited company and use the camera for the personal use then you have to pay benefit in kind tax on use of the company asset!

Don't forget it's a flag item too!

Better, buy the camera, take the knock on it.