Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
I assume that the money's you were transferring were not for expenditure on the company's behalf, but for your own personal use?
Please advise so that I can assist you further.
Right, there are a number of points to consider here. Expenditure on courses to enhance existing skills of an employee can be passed through the company's trading account. Courses to acquire new skills cannot be set against Corporation Tax (CT). As a director you are an employee per se so paying for courses is acceptable. However any payments made to you by way of salary must be made through PAYE channels.
You can use one bedroom of your house for business purposes and charge the company, just make sure that it is available as a bedroom also ie have a bed in it!
Your laptop is classified as an item of plant and machinery, the definition is extremely wide, and is a Capital Allowance (CA) item. The company will be entitled to the Annual Investment Allowance (AIA) within the CA regime and this is at 100%. You thus write off the full cost of the PC against the company's profits in the year of purchase. CT computations do not recognise depreciation although traditional accounting does.
Now presumably you are left with some moneys which have not been absorbed by the company yet passed to you, presumably as dividends. Dividends do not count against a company's CT computation so any profit left in the trading account will be taxed at the CT rate of 20%. On the other side of the coin dividends up to 5K in your hands are free of Income Tax (IT) from the 16/17 tax year. However, HMRC will almost certainly invoke IR35 and insist that these payments are in reality salary and taxable at your marginal rate.
There you are a quick gallop through company accounting and taxation. Confused, you will be! If you have any further queries please follow up on this thread.