The Book-keepers Forum (BKF)
The Book-keepers Forum (UK) -> Forum Information, Rules, News, Suggestions & Updates! -> Employee capital contribution for company car purchase
Post Info TOPIC: Employee capital contribution for company car purchase
Mark99


Member

Status: Offline
Posts: 22
Date:
Employee capital contribution for company car purchase
Permalink  

I look after a smallish limited company, where the director has bought a company car which is also available for private use.  The car cost £8400, but the director contributed £2000 of her own money.  I'm not sure what the correct accounting treatment should be for this contribution.  The first part would be Dr Fixed Assets £2000, but not sure what account to credit.  I can't credit the Director's Loan A/C, because it's a contribution not a loan to the company.

Any ideas?



__________________
Cheshire


Master Book-keeper

Status: Offline
Posts: 8646
Date:
Permalink  

Hi Mark
Dare I ask - why has she done this? Not sure what exactly its going to achieve. Has she taken advise of an Accountant re this and also the impact on her personal tax of her using a company car as opposed to claiming mileage for using a personal car? 



-- Edited by Cheshire on Friday 4th of November 2016 08:57:02 AM

__________________

 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Mark99


Member

Status: Offline
Posts: 22
Date:
Permalink  

She didn't ask anyone's advice before doing it.
However, as the private use of the car is calculated as a benefit in kind of just over £1k per annum, meaning a tax liability of just £200, it probably wasn't such a bad idea.
I rather think the £2k contributed might be credited to Employee Costs, as it effectively reduces the salary paid out to her by this amount.

__________________
Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.
The Book-keepers Forum (UK) -> Forum Information, Rules, News, Suggestions & Updates! -> Employee capital contribution for company car purchase
Tweet this page Post to Digg Post to Del.icio.us
Members Login
Username 
 
Password 
    Remember Me  
©2007-2024 The Book-keepers Forum (BKF). All Rights Reserved. The Book-keepers Forum (BKF) is a trading division of Bookcert Ltd. Registered in England Company Number 05782923. 2 Laurel House, 1 Station Rd, Worle, Weston-super-Mare, North Somerset, BS22 6AR, United Kingdom. The Book-keepers Forum and BKF are trademarks of Bookcert Ltd. This forum is a discussion forum only. There will usually be more than one opinion to any question and any posting should not be viewed as a definitive solution. No responsibility for loss occasioned to any person acting or refraining from action as a result of any posting on this site is accepted by the contributors or The Book-keepers Forum. In all cases, appropriate professional advice should be sought before making a decision. We reserve the right to remove any postings which are offensive, libellous, self-promoting or engaged in covert marketing. We will not notify users of removals. The views expressed in the forum posts are those of the individual and do not necessary reflect or agree with those of The Book-keepers Forum. Any offensive or unsuitable posts will be removed by the moderators. Any reader of this forum can request for a post to be looked into by sending an email to: bookcertltd@gmail.com.

Privacy & Cookie Policy  About