New PC for limited company

W

WGT

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This is probably a simple question but here goes anyway.
I'm about to buy a PC for my limited company. Is it better if ...

a. I buy it out of my personal funds and then charge it as a director expense to the company.
or
b. Buy it out of company funds and charge it as a company expense.
 
I'm not really an accountant either but it seems far more normal that the business entity buys what it needs from its own funds.. like everything else the business is buying.

The PC will be stored and used on the business premises?

It might be different if it was a laptop which would be brought home at night for personal use.. two issues here would be data security and the second would be some kind of benefit in kind tax thing maybe?
 
Thanks all, I will buy PC through business then.
Does anyone know if Aldi will have a problem if I pay by company cheque.
If not, can I pay out of my own pocket and write myself a cheque from the company or will that look dodgy to the revenue.
 
If you're not VAT registered, it really doesn't matter which way you do this. The end result is the same, whether you pay and are then reimbursed, or whether the company pays directly. There's no reason why the revenue would necessarily have a problem with this, as long as it's above board (i.e. the computer is a legitimate business expense and is used for your business).

If your company is VAT registered it's another story, as you will only be able to reclaim VAT on items invoiced to the company in the correct way.

(Note, I am not an accountant either, and you should consider raising this issue with your company's accountant, if you have one - which you really should).
 
If your company is VAT registered it's another story, as you will only be able to reclaim VAT on items invoiced to the company in the correct way.
Click to expand...
Are you sure about that?

How are companies without company credit cards meant to order stuff off of the internet?
 
Once the expense or payment can be shown to relate to the business, then the VAT can be claimed back.
An example would be a company employee paying for diesel and then claiming it back through expenses. The VAT can be reclaimed through the company even though there is not a direct invoice to the company.
 
Companies who need to purchase online should really have a company credit card...

While the example of diesel may be true, I don't think it'd be wise to do it that way on an ongoing basis...

A company is supposed to be its own seperate entity from the people who run the company and are employed by the company, it should really be in a position to pay for goods and services from its own means and accounts, either with cash from petty cash, or cash from a cash fund for buying things.. or from a company credit card if purchases must be made online..

In the case of the diesel I think the company would have two documents to support them.. the original receipt from the petrol station.. and the expenses sheet which details the fact that the amount on the receipt was re-imbursed to the employee, if either of these isn't in place I don't think the VAT could be claimed back or the expense considered to be a valid expense... of course you can do it.. but if audited you'll be asked 'why give money to employees for nothing?' (should be subject to tax or BIK), or else 'how are you claiming VAT back on a employee expense with no receipt?'

It'd be easier really just to pay from company funds..
 
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