[Closed] Limited company contractors - how to do expenses?

Should I buy the panniers direct from the limited company account,

Yes

Should I buy the panniers direct from the limited company account,

Yes.

The organisation have me coming into the office

I hope you mean "I have agreed with the organisation that I'll mainly work at their premises, but retain the right to work wherever I like". If the organisation can determine where you work, that's an IR35 warning flag.

I've come across some information on the QT that one of our IR35 contractors is setting up his Son (who is at University) as an employee of the Ltd company. Is that legit? Son does no work for us, he's also set his wife up as a director.

Whoever works for a contractors limited business isn’t any concern of yours. That’s how it is legitimate.

Same way as you wouldn’t question the photocopy repair man if he had an employee.

SSame way as you wouldn’t question the company the photocopy repair man works for about who else they employ

You contract with the LtdCo, not the individual. Ditto, the individual works for the LtdCo, not you. How the LtdCo is none of your concern

(although HMRC would be interested if he was paying his son a salary from the LtdCo for no work, and therefore offsetting that against Corporation Tax, as a means to avoid giving his son money for university from his own income, which he would have paid income tax on)

(although HMRC would be interested if he was paying his son a salary from the LtdCo for no work, and therefore offsetting that against Corporation Tax, as a means to avoid giving his son money for university from his own income, which he would have paid income tax on)

How much money would they stand to gain by doing this, over say a year? I guess very little

No you should be buying them out of your own pocket unless the method of transport is solely owned by the business also, I assume you own the bicycle and are claiming the 25p a mile ? Buy your bike out of the company coffers also (you will be amazed how many people own 10k Pinarellos that are company assets lol)

His Wife can be setup as a ltd co director to claiming the dividend allowance before tax and so can his son iirc its 2k, he is basically offloading 4k of profit to family members who may/may not be playing a day to day roll in the business, which wouldn't matter , you can be a director and sit with your thumb up your arse if you can get away with it. Son could also be getting salary of 8k I think before it starts being subject to NI ,

You would be entitled to do the same.

How much money would they stand to gain by doing this, over say a year? I guess very little

Well, let's say he wants to give his son £6k a year (£500 a month, seem reasonable)

For him to have that, he'd have to draw £10k from the company, assuming he pays 40% tax, and pay £4k income tax on it. That £10k comes off the profit of the company.

If he pays it from his company, he pays no income tax, and £6k comes off the profit of the company. The difference in profit (£4k) attracts 20% Corporation tax, so £800.

£4k - £800 = £3200 less tax paid. I think HMRC would be interested in that.

Yes; pay through ltd co bank a/c and show the cost as a tax deductible expense in annual accounts/corp tax return.
As for pieface's post re IR35 contractor, they have freedom to appoint directors subject to compliance with regs but the bigger question is...did the contractor in question negotiate a significant increase in day rate to compensate for c35% reduction resulting from being designated as inside IR35?
Did the employer/agency use the HMRC status test to identify in/out of IR35 or did they, as most do, just apply blanket designation to all contractors?

although HMRC would be interested if he was paying his son a salary from the LtdCo for no work, and therefore offsetting that against Corporation Tax, as a means to avoid giving his son money for university from his own income, which he would have paid income tax on

And HMRC staff are instructed to report ANY information they hear from any source within 72 hours

🙈🙉🙊

Should I buy the panniers direct from the limited company account, or buy them myself and then submit an expenses claim to the limited company and transfer the money into my personal bank account?

It doesn't matter, either is fine. Ultimately it's just a company expense. But remember, whatever you buy is solely for use by your ltd company 😉

It doesn’t matter, either is fine. Ultimately it’s just a company expense. But remember, whatever you buy is solely for use by your ltd company 😉

Is the right answer. I used to have a company credit card for this sort of thing, but now I just buy on my personal cash back cards and then pay myself back out of the company main account.

On a practical level it’s easier not to have to reconcile a company credit card account and main account.

Will just buy through company bank account, ta.

How do I go about claiming my bicycle mileage allowance? Keep a log, tot it up monthly and just do a direct transfer from company bank account to personal one? Or does it need to go through with salary payroll?

The key words are "wholly and exclusively" which means that you can only put work stuff in your panniers 😉

Have you got an accountant? I know you don’t need one, but being new to this, it might be worth getting one, at least for the first couple of years.

Aye, might need to employ the services of a professional. Though I am quite enjoying seeing how it all works.

To be fair, the panniers are actually for work trips. No real use for them otherwise. I already have the bike though

As for '...employing the services of a professional', if your ins/outs are relatively straightforward and you don't fancy paying £600+ for the privilege then do your own.
If you have a phobia about numbers that might be different.
If yours is a 'simple business'- provide service, invoice client, receive payment, incur necessary business expenses, pay/record/show them as (tax deductible/allowable) in annual accounts you don't need an accountant.
Companies House and HMRC don't have the resources to investigate so, even if you were trying to game the system, the likelihood of being caught is infinitesimally small.