Can I record a purchase as a business expense if it was paid for through my personal bank account?

Question

For example if I was to go out and buy something for my personal use, which I then thought could have also been used for business use, could I put the receipt in the business expense folder in order to claim back the VAT? Would I have to prove that I have been paid the sum of money from the business into my personal account, i.e. to show the business has in fact paid for the item?

Answer 1

The business doesn't have to pay for items to reclaim the VAT, as long as there is a VAT invoice, preferably made out to the firm.

However, if there is duality of purpose, they might dispute whether it is a business item.

Answer 2

According to the accounting rules, and their principles and qualitative characteristic, you have to state those items that you've bought as equipment or stationary - as long as it is beneficial to the company and not classified under current asset. It is therefore a non-current asset. It is not an expense. The items then will belong to the organization. If you have bought it using your own personal cash, it will not be recorded at all, unless you decided to contribute it to the company - then it will be stated as additional capital and will be under OE.

Last thing, all those items that you wish to help the company to purchase ( not for personal use ), be prepared to show all the legal receipts - so that you can redeem those cash! =) Hope this helps!

Answer 3

I'd defintely do it. I'm not how legitimate it is but people do it all the time, even for items that are personal only, not business.

It doesn't matter what account it's paid from but you could get your business account to reimburse your personal account for the amount.

VAT is a funny tax, as a trader you generally don't pay it, you only help administer pushing it on to the eventual consumer.

The rules are stricter for income tax and corporate tax.