Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hello, this is Jim and welcome to JustAnswer.
Thank you for the question, just a note that as an internet forum, it is not private so we ask that personal details are not given when you ask a question - if they are, the site moderators will redact them. If you could please set out your question for me.
Thanks, ***** ***** not see a problem unless a third party was affected due to this (i.e a customer of yours or a supplier)
The Companies Act 2006 applies to you as you are a director - meaning that you could be liable if you :
● Failed to act within the powers under the company's constitution;
● Failed to act in the company's best interests;
● Failed to exercise reasonable care, skill and diligence when carrying out their duties;
● Failed to refuse benefits from third parties;
● Failed to avoid a conflict of interest;
● Failed to exercise independent judgment; and
● Failed to declare any personal interest in a company transaction.
Are you worried in that the money being spent has meant someone else has been affected?
Thanks, ***** ***** be a breach of fiduciary duty under the Companies Act though my understanding is that as long as you repay it to the business then it would be fine though it would be more of an accounting issue in my view.
I can opt out so that you can speak to an accountant on this site if that helps?
No problem, I will opt out and someone else will be along soon, thanks
May I ask how much does this amount to and what type of expense you paid yourself for it and I assume you paid it tax free - is there sufficient profits left in the company for year end when the corporation tax has been paid ?
Do you keep your own acconts and will you be filing your own tax returnThanks
So what oitems as I cant answer with aone answer fits all scenerio
So with respect what made you think you could use company money - ?
that aside there are three ways of approaching this as your own accountant can also clarify but only two are really going to be the safest option to avoid being struck off for misappropriation of funds
1) You declare these items as a company benefit which you can only do if paid using a company credit card but then would have to claim ALL expenditure even that which is company costs on which the company then pays class1A national insurance and you would pay income tax on these amounts
Link here re company benefits https://www.gov.uk/guidance/how-to-complete-forms-p11d-and-p11db
The second is that you pay all the money back so you have covered all non business expenses and you need to do this before the year end - if you cant then you can have this treated as a debit to the directors loan account but will pay tax on it as a company benefit as above and also the company pays tax on this debt too
Link here re directors loans https://www.gov.uk/directors-loans
Finally you pay it as a dividend however if you have used the company credit card this is NOT an option
Ask your own accountant the ebst way to proceed and obviously do not spend any more money in this fashion . you should pay yourself a set annual salary and dividends to have money for your perdsonal life
You are vwey welcome