I'm thinking of having a company credit card.

Example:

If I say purchase a laptop for ?00 on the company credit card, I would normally pay the balance off in full when the statement comes and put the ?00 through my books.

Now if for example I can only afford to pay off ?00 the first month, I will incur interest on the credit card. Can I also put this interest payment through my books?

If so, do I just put what I pay my credit card through my books rather than the ?00 in full?

Hope that makes sense?
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Are you using bookkeeping software?

Normal procedure is to set up the CC as another bank account, which in effect it is. The purchase would be a double entry between that CC Bank Account and a capital equipment account (with the Vat separated if you are registered). The CC payments would then be an inter-bank transfer, with the interest element posted to 'Interest Paid' on the P&L.
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No bookkeeping software - just an excel spreadsheet.

I don't understand what you mean by capital equipment account.

Sounds complicated.
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Are you using bookkeeping software?

Normal procedure is to set up the CC as another bank account, which in effect it is. The purchase would be a double entry between that CC Bank Account and a capital equipment account (with the Vat separated if you are registered). The CC payments would then be an inter-bank transfer, with the interest element posted to 'Interest Paid' on the P&L.

If your not using double entry bookeeping, would you not just record the last part of your statement and the interest just claimed as a business expense against Corp tax?
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I don't pay Corp tax as I'm a sole trader.

So I wouldn't claim the ?00 for the laptop but instead whatever I pay off the credit card each month?
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You will receive capital allowances on the laptop as it is a fixed asset. You cannot write the total cost of ?00 in one tax year. (If this is greek to you a meeting with a local account would be a good idea).

You can claim the interest on your credit card but only the amount relating to eligble business expenditure.
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You will receive capital allowances on the laptop as it is a fixed asset. You cannot write the total cost of ?00 in one tax year.

If it's after 6th April 2008 then yes you can - AIA.
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Of course. Sorry, some of us old timers forget about these new fangled developments.
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Of course. Sorry, some of us old timers forget about these new fangled developments.
Aye next years tax returns are going to be fun.... ! :eek:
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So I can claim the ?00 back as an expense?

If its a company credit card then all the interest will be for the company so am I right in saying I can claim all the interest?

So I'm 100% clear, and back to my example...

I buy a ?00 laptop (or anything for the business) on a company credit card.

I put the receipt or invoice for the purchase through my books.

If I incur any interest on the credit card I put that through my books as well, and keep the credit card statement as proof, every month I owe any.

Thanks
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I assume you mean you are using a personal credit card but used entirely for business? If so then yes, what you have said is correct.

It only becomes complicated if you then use the card for personal items.
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No, I'm going to get a company credit card but I guess the same rules apply.
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No, I'm going to get a company credit card but I guess the same rules apply.

Mike

There's some confusion here because you refer to a "company" credit card - but there is no company, hence, as Zeno says, it's a personal credit card which you will use exclusively for business expenditure, in which case you can claim the interest in full as a business expense.

Chris
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When I look on my banks website for a business credit card it lets me fill in a applications for a business credit card based on me being a Sole Trader.
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This just means you will get a card that has on the statement Mike "Smith" T/A MJF CAD Solutions. This is for all intensive purposes just another personal credit card.
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Sounds OK to me.
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You will probably be charged around ?0-30 PA for having this card.
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