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BizarroAzrael posted:Okay, so what do I do if my company has no funds at present? I was going to set up a Monzo account for it (I've seen recommendations, but last time I was contracting I used NatWest) which I imagine I just need so HMRC can pay VAT back to me, then I just send them my business expenses and they refund VAT to the company? Then I guess pay myself a dividend with them? (or just leave it for later business uses) I have a limited company so I can share what I do from my own experience. If your company has no funds (as pretty much all do when starting) then you need to get some. That can come in different ways but one of the most common would be an owner/director loaning the company money. Effectively if its just you then you would create a business bank account and then transfer some funds to there from your personal account that you can then use to purchase goods, stock, equipment etc to get started with whatever you are doing. Your company does not pay any tax on the money you lend it and you have as much time as you like for the company to repay you. You can set up terms with interest and whatnot but that gets a lot more complicated and is more likely to happen once your company is established. In addition a company can lend a director money but it needs to be paid back with 9 months and can have some big penalties if not done correctly. You do need to record these loans on the company's accounts but that's pretty simple with any basic accounting software. Once you have that money in there you would use those funds to purchase the items and then every quarter you would submit a VAT return where HMRC then pays you back the VAT. It has to be for business expenses only as many people do try to take the piss out of this so don't be dumb with it (e.g. buying yourself a jet ski and then claiming the VAT back). I use Xero for my accounting as it's fairly cheap, simple and ubiquitous. It also allows you to just reconcile things and then connect it to HMRC to do the VAT return for you. Registering for VAT is pretty simple and definitely a good thing as far as legitimising your business but not really needed if it's going to be a simple side hustle or low turnover (I think the cutoff is £85,000 turnover before they force you to register).
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Mar 21, 2024 17:56
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I'm using my laptop for work nearly all the day through Monday to Friday so I can pretty safely say it's 100%. Sure it might be used to check personal emails or come on here on ocassion but I think it's just being responsible and not buying a gaming laptop that doesn't even go into the office.
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Apr 4, 2024 08:41
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BizarroAzrael posted:Okay, so I think I need to transfer funds into the business account, then back out to "purchase" stuff from myself? I have a spreadsheet of expenses I need to do this for, mainly this computer and a course I got, do I need to track loans in either direction, or only from the company to myself (which I don't presently mean to do)? Possibly I just need to say how much went in as a loan as opposed to income? You should be able to get some kind of visa/mastercard with your account that allows you to make purchases. If not it's easy to find a business bank account that offers that. If you're paying with a personal card and expensing it back to yourself then do as the poster above says. This is very easy to track if you're using any kind of basic accounting software. I use Xero and it just connects to my business bank account automatically and then I reconcile each purchase into the different bucket it belongs to. For example the Laptop would be Office or IT equipment (and then appear as an asset) and the course might fall under something like Training. If you are only going to have a handful of purchases in the next few months then you probably wouldn't even need accounting software as it's literally just a few lines in a spreadsheet. However I think you'd then have to do a VAT return manually and HMRC are pushing to get everything digital.
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Apr 4, 2024 18:14
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