vAT question - any accountants?

Snooze

cotswoldaccountant wrote: »

You can bill your client for whatever expenses you have agreed with them, and must charge 20% VAT. The recharge will be shown as turnover in your company accounts. The only evidence that HMRC will require are correctly prepared VAT invoices from your company to your client.

However, unless you include a mobile phone cost in your business accounts, you will have to pay corporation tax on the recharged phone costs because they are part of your business profit.

Assuming that you are an employee of the business, you will wish to reclaim your mobile phone costs from your limited company. This would reduce the company's profit thus saving Corporation Tax on the phone expenses. However, an employee expense claim for mobile phone costs can only be done without a benefit in kind implication arising if the mobile phone contract is in the name of the company, or if you are claiming the cost of separate itemised phone call costs (at which point you will need the phone bill to back up your claim, and your company's subsequent VAT reclaim). It's a tricky area, and I would advise that you discuss with your accountant.

The company is mine and I am the sole director. There is no-one else involved. Interesting point re the CT. Will have to see what's best thing to do there.

cotswoldaccountant

Snooze wrote: »

The company is mine and I am the sole director. There is no-one else involved. Interesting point re the CT. Will have to see what's best thing to do there.

Makes no difference whether there is anyone else involved. As sole director/employee you will need to be careful if you claim back your own personal mobile phone costs from the company, as per my post.