Personal Purchases

[danimal]

Hello again,
I use my own car for business mileage, and I have paid for petrol with my own business debit card... (less than what is owed me at the mileage rate)
When it comes to accounting this, should I encode the entries in CurrentAcccount.ods as CR (to the petrol station) or DL (back to to me as director)?

I do have a Ltd Company...

Thanks,
Daniel

[Lord Hutton]

You have done the reverse of what would be normal for using your private car for business miles! Normally you pay for your petrol using your personal card or cash and then claim the business miles allowance as a monthly expense - showing this as a "purchase" in your company accounts and then transfering the same amount from your business current a/c to your personal account.
You have already incurred the purchase on your company debit card which will show as an outgoing in your current account. Effectively you are now using company petrol for your private miles!!
I would simply make an entry in other income transferring from your personal account to the company the amount of the petrol purchased in total, with an appropriate note (wrong card used!!), then revert to claiming the mileage as normal.

[danimal]

Hi Lord Hutton,

Thanks for the reply.

Can I admit to having done this 4 times over as many months to tune of £170 in total? It seemed ok... because the company owed me maybe 4 times as much in petrol money, so was already in my debt.

So... do I need to make an actual repayment from personal act to business act? OR can I (more) simply use the CashAccount spreadsheet to subtract these amounts from the Directors Loan?

Sorry for the muddle

Daniel

[antonycc]

Hello,

As long as you are owed more than you'd paid you can capture this with a couple of entries. here's what to do:

1. Create an expense form (copy expensesform.xlsx/ods to "<yourname> Expenses") and just use one of the sheets the expenses so far. This is the total amount of expenses incurred as part of business activities.
2. Enter the total amount of expenses in purchases breaking down into separate lines if there are different categories and VAT rates involved.
3. In the current account set the debit card payments to code CR (payment to creditors) in this case you are the creditor as an expenses claimant.
4. Subtract the total expenses being claimed from the total the debit card payments already made. Pay yourself this amount and record in current account at a payment to creditors.

After this you should have:

• A record of total personal expenses incurred
• An entry in purchases for the cost of these expenses to the company
• 4 interim payments made for these expenses
• 1 additional balancing payment to clear the expenses debt

Thanks,

Antony.

[danimal]

Hi Anthony,
regarding this I think I understand what you have said above, but would like to do this another way as make a directors loan to the company & don't wish to have it fully repaid to me yet.

To put this in context, I already use the method you mentioned in the post "/diy-accounting/accounting-purchases-paid-director-20515.html" to transfer the debt from trade creditors to the directors loan account using the cash account.

I regularly complete expense forms & company currently owes me (via Directors Loan) more than the petrol payments we're talking about.

In this context then can I use the following procedure instead for each month I did this?:

• create monthly expense form
• Enter the total amount of monthly expenses in purchases breaking down into separate lines if there are different categories and VAT rates involved.
• In the current account set the debit card payments to code CR (payment to creditors) with me as the creditor
• Subtract the debit card payments already made that month from the expenses being claimed that month. Record a payment to myself for a reimbursement (payment to creditors) in the CASH account.
• Also in the Cash Account, Record a receipt for the same amount from the directors loan account.

Then.... Not do this (buying petrol from company a/c) again!

Phew! (I hope)

Thanks once again,
Daniel

[antonycc]

Yes, that looks like it would work.

[fillo]

Hi,

sorry to jump in, but being an absolute beginner could i clarify something regarding petrol expenses and claiming for them....

if i made a round business trip of 100 miles and for arguments sake this cost £15 in fuel, having seemingly made the same mistake as Daniel and paid for this on my business debit card, does this actually matter that i paid for the fuel out of my business account? ive recorded the trip on the purchases spreadsheet and been allowed the £45 expense (100 miles x 45p), however i have not recorded a £15 fuel transaction on my purchases spreadsheet.

couls somebody kindly explain any(!) errors in my ways....

kind regards,
simon

[antonycc]

Hello,

As long as you account for the allowable expense in total, how the payments were broken down doesn't matter.

The case at the start of this thread involved a limited company which made things more complex as it is an entity with its own money. In your case it's all your money and when you declare the business miles the £45 will come off your taxable profit.

Thanks,

Antony.

[PorkyBoy]

I have made a couple of personal purchases through the company recently - mostly "accidentally" with the wrong default credit card by PayPal.
I had planned to allocate them to the directors loan account in the interim as (see previous post) I have been using this to pay monthly "dividends" during the year. The balance would then be cleared by a single payment when the dividend is declared.

How do I allocate the purchases to the DLA as there is no category for this in the Purchases table? I can't put it through the Current Account sheet either as it isn't a "physical" payment as such.

Many thanks.

[antonycc]

I'll merge this thread with another which discusses a very similar issue.