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ymorar
Level 1

Can I claim back VAT on items purchased for the business using personal money?

Hi,

I'm the director of a new company which has no assets or balance in the bank account. I'm paying for subscriptions and various company-related items with my personal money, and listing these as non-current liabilities "due-to-ymorar", as I don't know when the company will be able to pay me back.

 

However, I was wondering if I could claim VAT back on these purchases, given that it is a loan? I am VAT registered. 

3 REPLIES 3
MaryAnn_E
QuickBooks Team

Can I claim back VAT on items purchased for the business using personal money?

Hello there, @ymorar.

 

 

Let me share information on how to record the payments coming from your personal funds in QuickBooks Online.

 

You can record the expense you paid via personal funds by using the Journal Entry feature and create a cheque for the reimbursement. The detailed steps in the article below will help record the transactions specific to the expenditure.

 

Here's how:

  1. Select + New.
  2. Select Journal entry.
  3. On the first line, select the expense account for the purchase.
  4. Enter the purchase amount in the Debits column.
  5. On the second line, select Partner's equity or Owner's equity.
  6. Enter the same purchase amount in the Credits column.
  7. Select Save and close.

 

Then you can create an expense for VAT and TAX purchases.

  1. Select + New.
  2. Select Expense or Add expense.
  3. Select a bank account to use to repay the personal funds.
  4. In the category column, select Partner's Equity or Owner's Equity.
  5. Enter the amount.
  6. Select Save and close.

 

This way, you get records for VAT and tax purchases from your receipts.

 

I'll add this article as your reference on how to record business expenses you made with personal funds in QBO: Pay for business expenses with personal funds.

 

To make sure your books are accurate, I'd recommend consulting an accountant. 

 

If you have more questions, you can drop it below. We'll check your post from time to time.

ymorar
Level 1

Can I claim back VAT on items purchased for the business using personal money?

Hi Mary Ann,

 

Thank you for your reply. 

 

As I have no funds in the business bank account, is this still applicable? I can't technically pay this expense back yet, so how is this managed? I don't intend to pay myself back for these items within the next 12 months.

 

Kind regards,

AlexV
QuickBooks Team

Can I claim back VAT on items purchased for the business using personal money?

Hello kevinneal,

 

Welcome back to the QuickBooks Community.

 

I'd advise that you speak to an accountant on how to handle this. They can assist you further on you would enter this correctly so you are able to claim the VAT back.

 

I'm adding these articles for your reference:

Post again if you need more help. We'll respond as soon as we can.

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