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Community Contributor **

Splitting expense costs between two companies

Hi I was wondering if anyone could help me with this (I may be missing something obvious):

I am a Director of my own limited company and I am working on a contract with another guy who has his own limited company.

We are currently using airbnb to book apartments each week. We wish to split the cost however the costs vary so cannot simply pay a week each etc.

Therefore if I book the apartment and pay through my company, how do I account for the money coming in from him as it is not income it is merely payment of his half of the expense? 

The accountant said we can claim for half of the cost etc, however I am unsure how to use quickbooks to show these payments.

Thank you

 

6 Comments
Established Community Backer ***

Re: Splitting expense costs between two companies

book your payments to the travel expense account you would normally use

when you get his payment, deposit it an use that same travel expense account as the source (from) account for the deposit

Community Contributor **

Re: Splitting expense costs between two companies

Thank you, that has worked out for me in respect of the account and bank showing correct. The only remaining question is how I account for his half of the VAT in the account without showing it as VAT on sales (distorting my income for VAT purposes) to make the figure correct. 

I do not wish for it to appear that I should be paying VAT as a sale.

Thank you

Established Community Backer ***

Re: Splitting expense costs between two companies

Luckily I am in the US and do not have to mess with VAT, sorry I can not help there

Established Community Backer ***

Re: Splitting expense costs between two companies

I know from painful experience that that you cant claim any portion of the sales tax expense if the vendor bill was issued to someone else (even if you agreed to share).  The safest thing to do is that one party pays the entire bill, claims all the tax and then bills the other party for half plus tax. Then both parties will have a valid bill.

Alternately you have to get the vendor to issue the original bill to both parties jointly.

Community Contributor **

Re: Splitting expense costs between two companies

Thank you!
This is what i feared we would have to do. Currently i am just under the threshold for VAT but if I am correct in thinking, by creating an invoice to return half payment to my company it would add to my income and therefore I will most definitely have to register for Vat (when in fact it would be repayment of an expense)??

We keep trying the request for split invoice but with airbnb the vat is on the service fee which is a receipt downloaded from them direct and they have already advised they cannot split an invoice.

Regards
Sheldon

Community Contributor **

Re: Splitting expense costs between two companies

I wish I didn't have to either. Thank you