Hello.
I wondered if someone could help me.
We are a LTD company and one of my employees (who also owns shares) has used his company bank card in order to pay a couple of personal items. He is very forgetful and when he has gone to pay for things, realised he does not have his own card with him and pays with the company one.

He has done this twice now. On the first time I discovered it he had "forgot to tell me" but had put a cheque from himself in to the company bank account to replace the amount. He was warned not to do it again.

He has just done it a second time so I have cancelled his card. What I wondered is, what is the best way to account for this in my accounts. Should I do it as an employee loan or is there some better way to do it and are there any tax implications?

Many thanks in advance.
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Probably Ok to regard it as an employee loan.

Very little tax implications and probably none if it is repaid fairly quickly.
If the loan is outstanding for quite a while and no interest is charged then it could be viewed as an employee benefit and the interest declared on the employee benefits form but this would be a little picky in the circumstances and not really relevant if repaid without delay.

The money could be deducted from the employee wages but employee has to agree this before the deduction is made.
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Is he a director as well as a shareholder?

If director - then put to his directors current account.

As he is a shareholder I think he may be a bit harsh to cancel his card - given he owns part of the company :)
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As he is a shareholder I think he may be a bit harsh to cancel his card - given he owns part of the company :)

I disagree, technically the employee was guilty of theft and after being warned committed the same offence again which at the least would be gross misconduct. I think withdrawing the company credit card is a slap on the wrist and had the offence gone unpunished others might do the same.
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I disagree, technically the employee was guilty of theft and after being warned committed the same offence again which at the least would be gross misconduct. I think withdrawing the company credit card is a slap on the wrist and had the offence gone unpunished others might do the same.

I'm afraid I have to disagree with this. My legal argument would be that there was no intention to permanently deprive, therefore no theft. If the money was repaid to the company before the credit card bill was due then the company hasn't even really lost out (other than it has lost the benefit of that amount of credit for a small period of time).

As Elaine, think it's a bit harsh to cancel card.
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When an employee acts in this way, albeit the mitigating circumstances indicate there was no intention to defraud, the company is right to take positive decisive action to avoid bad practises developing.
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If the company doesn't want it to happen, then they are right to insist that it doesn't.
Clearly it's causing the OP some issues with recording it in his books, thus costing the company time and money. The company should not be expected to provide the employee with temporary cashflow, especially if they didn't ask for it in advance.

I know the employee seemed to act forgetfully not dishonestly, but it's still not acceptable behaviour. I think cancelling the card is less harsh than a written warning (Which would say what? If you do it again then we will.... ?). Does cancelling the card cause any problem for the Employer?
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Yes, fair comments that the company can insist it doesn't happen. We don't know all the circumstances admittedly but maybe the warning wasn't sufficiently stressed the first time. Maybe the first time was seven years ago. I just wonder if there was an option of stressing it is against company policy and it's not to happen again before card was cancelled.

If this has already been done then maybe cancelling the card is not enough and a written warning should accompany it.
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In every company I worked for, we used to investigate this and it was gross misconduct. It is unauthorised use of a company credit card not theft but it's still Gross Misconduct. I think he got off lightly.
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I disagree, technically the employee was guilty of theft and after being warned committed the same offence again which at the least would be gross misconduct. I think withdrawing the company credit card is a slap on the wrist and had the offence gone unpunished others might do the same.

Do we know under what terms the card was provided?
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HI

I think this is a little harsh.

If he was paying it back seems unfair, how many times has this person gone to buy a business expense and found he has left the business card in the office and then used his personal card and got the amount back in expenses before he paid his credit card bill seems the same thing, if this person has used his personal card before it seems bit one sided.

Alison
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Thank you for everyone’s replies.

Thank you Terry, I will put it through as an employee loan.

Elaine - he is not a Director but does own shares as he helped set-up the company. I agree it is a little harsh cancelling the card but having spoken to him in the past, my thoughts were actions speak louder than words since he had not listened the first time. I will probably give him a card back again in the future, it was just to show him I am not a pushover.

My feeling was that cancelling his card was acceptable and discipline was maybe over the top. He was warned about one month before when he used the card twice in one week. I told him the money wasn't the issue (especially since he paid it back) it was the hassle of trying to account for it and asked him not to do it again, which he agreed. I am so busy that it is only now I am getting on to this and it is taking up valuable time where I could be making money not trying to legally and legitimately account for something which shouldn't be there.

It is in his terms and conditions that he should not use company money/property etc etc for personal things. I also agree that there are times when employees use their own money etc and I am very flexible. My rule is that if it has a receipt then I will pay it and I also cover things like coffee from a machine or similar items where receipts are not possible as a good will gesture as I trust everyone who works for me, after all it tends to only be a few pounds here or there without receipts.

Cancelling the card will cause issues because he is in charge of a number of financial things which I will now have to take over but we will see how it progresses.

Thanks again everyone.
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