Can you expense cash withdrawal as a LTD company director??

heffa_lump

A quick question! I am the co-director of a LTD company (micro entity). I went on a short business trip where pretty much everything (within reason) was paid for using the company card. However, as we were taking a taxi, we needed to take out some cash and so I withdrew from my personal account rather than my company account. It was about £50. £40 of that was spent on taxis which we have receipts for, however £10 was spent on lunch which I have no receipt for.

Is it ok to expense this cash withdrawal when I am doing my company accounts, since it was taken from my own bank account. It was used for business expenses, and usually if I pay for a business expense the company repays me, however I am mainly concerned that there really isn't any proof (other than some pictures) of where that £10 was spent. Do I just class this as a "petty cash withdrawal" and specify what it was used for?

Maybe I am fretting a lot over just £10, but I want to make sure I am doing my accounts right as I do them myself.

agrinnall

I'd just claim for the taxis and forget about the £10 for lunch. The chances of HMRC actually questioning it are quite remote but if they did and you have no receipt then they might be tempted to delve deeper. And in future get receipts for anything you spend.

00ec25

you travelled outside the UK on company business...
you have £40 of receipts...
you submit them to your company as a documented expense claim and reimburse yourself £40

in addition....
on your expense claim you claim the the overseas rate personal incidental expenses which are £10 per night and do not require you to produce any receipts whatsoever to support your claim. QED you may end up with more than £50 reimbursed, all perfectly legally

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim02710

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim02730

agrinnall

00ec25 wrote: »

you travelled outside the UK on company business...

I don't see anything to suggest it was a trip outside the UK. And the fact that the only currency mentioned is sterling would indicate that it was a UK trip.

TheCyclingProgrammer

Honestly, if it was all spent on business travel and any related subsistence I would just re-claim the entire £50. Yes you should keep evidence of expenditure - receipts ideally, especially for cash transactions, although bank statements can also be sufficient in some circumstances.

But as long as you're rarely putting through genuine but unreceipted out of pocket expenses and not making a habit of it, I wouldn't worry too much about it getting flagged up in the event of an inspection (which in itself is fairly unlikely). I don't think it would give too much cause for concern. If you're habitually claiming things without any evidence then this is more likely to cause an issue IMO.

00ec25

agrinnall wrote: »

I don't see anything to suggest it was a trip outside the UK. And the fact that the only currency mentioned is sterling would indicate that it was a UK trip.

so i misread "short business trip", does not alter the fact that if such trip included staying overnight he can claim the UK allowance of £5

if he did not stay overnight then, as mentioned above, HMRC are not going to be pedantic over a £10 claim. Obviously in the case of a one man personal service company the claimant director should be setting a very high standard and omissions should be exceptionally rare. The actual requirements for checking of expense claims (after 16/17) are here:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim30270

Note the following:
Vouching of expenses
In some instances, lack of an independent voucher or receipt is not necessarily a bar to an exempt payment - for example, parking charges or subscriptions to an approved body under Section 344 ITEPA 2003 (see EIM32880).

It is also likely that while undertaking periodic checks, the employer will find that employees have not, on occasion, been able to obtain or retain receipts for qualifying expenses incurred. The employer must monitor omissions to ensure that there are reasons for the lack of receipts, they are not persistent and do not occur throughout the workforce. They should also, where appropriate, be able to demonstrate any action that they have taken to overcome problems of this sort.

Potbellypig

TheCyclingProgrammer wrote: »

Honestly, if it was all spent on business travel and any related subsistence I would just re-claim the entire £50. Yes you should keep evidence of expenditure - receipts ideally, especially for cash transactions, although bank statements can also be sufficient in some circumstances.

But as long as you're rarely putting through genuine but unreceipted out of pocket expenses and not making a habit of it, I wouldn't worry too much about it getting flagged up in the event of an inspection (which in itself is fairly unlikely). I don't think it would give too much cause for concern. If you're habitually claiming things without any evidence then this is more likely to cause an issue IMO.

Yea, pretty much this, OP.

You're way over thinking it.

heffa_lump

Thanks everyone for all the advice, and the links! I'll be saving those in case it comes up again in the future, especially with overseas travel. In this case in was indeed travel within the UK with an overnight stay. You are probably right that I am overthinking it, I just wanted to be extra sure, especially as I do my own accounts, and I often get told that you REALLY need to be certain of what you are doing (I try to be!) or HMRC will come after you.

prowla

You should be able to claim some non-specific out of pocket expenses (or even produce a hand-written receipt for the lunch).