How do you record a director's expense claim? i.e. if the director of a limited company paid for something with his own money for the company and then claims the expense from the company, how would this be recorded in the accounting?
What would you do if the director bought an asset for the company using his own money and wanted to be reimbursed for it?
That would largely depend upon the agreement between the company and the director.
To me it would not matter. If the asset is used in the business and owned by the business then its recorded as a debit to asset and credit to payable to director. Its no different than when you work for a company and spend money for business expenses and expect reimbursement.
If the director is donating or funding the business with the asset then thats different.
Could it be done as a debit to asset and a credit to director's loan (the director lending money to the company)?
Yes - If he bought an asset its debit asset as it belongs to the company. Credit is to Loan from Director as payable back to him/her.
I would research this some more as in the US, if something is called a 'loan' and doesn't have interest and a proper paper trail, it will be investigated. I would much rather just call it a payable versus a loan even though it is the same thing.
Is it acceptable to consider director's expenses as the company's in case that the company has only one director, he is the only employee and it is dormant?
I was assigned a client one of my colleges looked after previously. He has claimed VAT from HMRC on the director's expenses considering them as company expenses. The director is the owner of the company and this year the company has not made any revenue as the director was the only employee and he's travelling. Now I need to prepare the accounts and i'm not sure what to do.
I cant ignore those expenses as now the VAT has been claimed from HMRC. Pls advice what should I do?
If I take the expenses as directer drawings what are the consequences?