❌ Difference #2
Confusing Personal Assets with Company Assets: Costly Decisions

“I’ll pay this supplier using my personal card; I’ll reimburse the company later…”
“I’ll take out a subscription in the company’s name; even though it’s for my own use, it’s simpler…”

Confusing Personal Assets with those of the Company...

On the surface, these little workarounds make day-to-day life easier. In reality, they leave your company in the dark about its cash flows, cause you to miss out on tax deductions… and can undermine the credibility of your accounts in the event of an audit.

Why it matters

🔄 1. When you pay for a business expense out of your own pocket

Your company won’t see any transactions in its accounts → it can’t claim any deductions.
Without an invoice submitted, we can’t reclaim VAT (and we can’t guess what it is).
Even if you submit the invoice later, we have to manually link the payments to the expenses, which increases the risk of errors.

➕The advantage of double-entry bookkeeping is precisely that it allows us to verify that every invoice has been paid, and that every payment corresponds to an invoice (a process known as reconciliation).
Without this, you end up doing twice the work… for an uncertain result.
A practical example: a restaurant bill often includes two VAT rates (10% for the meal and 20% for alcoholic drinks). Without a detailed invoice, you can’t take any risks, and so you don’t get anything back.

🧾 2. When the company pays for a director’s personal expenses

This is a more serious issue, as it may be regarded as a misuse of company assets or an undeclared benefit in kind.
It must be demonstrated that each expense is in the company’s best interests and consistent with the corporate purpose set out in the articles of association.
The director does not own the company: they are its representative and act on its behalf.

➡️ The company is a legal entity in its own right:

It has a name, an address (registered office), a date of birth (date of incorporation), a legal form, a lifespan (99 years by default), and its own anniversary (the end of the financial year)… It does not belong to you: you serve it. And it is this rigour that protects it.

Our Guideline

💳 1. Pay business expenses via the company bank account

This is the best way to:

ensure VAT deduction,
avoid confusion,
enable us to do our job efficiently.

If an invoice is missing, the payment allows us to spot it and alert you quickly.

🚗 2. Regarding the vehicle, beware of common misconceptions

Buying a car in the company’s name may seem tempting, but it is often a false economy:

VAT is non-recoverable in most cases (as vehicles are still considered too ‘polluting’),
depreciation is capped, meaning part of the expense is never deductible.

✅ The best solution: keep the vehicle in your own name

→ We then calculate a mileage allowance based on the official scale (depending on the fiscal horsepower).

➡️ A Google Sheets file on your phone allows you to record your mileage day by day, very easily.

Tip: business tolls and parking charges can be paid by the company and are tax-deductible.

🏠 3. For premises: a service agreement

Instead of a simple ‘rent’, we suggest drawing up a contract that includes:

use of the office or workspace,
the coffee machine, the toilets, the lounge (for business meetings),
access to the printer, the internet, mail handling services, etc.

➕ This justifies the expense in a comprehensive and realistic way, whilst remaining within the rules.

📱 4. Mixed-use telephone: don’t panic

No need to overcomplicate things: the amounts are small, and the tax authorities generally don’t comment on this type of expense, especially if you use the telephone for business purposes.

The expert’s tip

Not every expense is tax-deductible simply because it is paid for by the company.
It must be justified, reasonable, and in the company’s best interests.

➕ Keeping business and personal finances clearly separate brings greater peace of mind, credibility and tax efficiency.