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Category Expense Paid by Third Party


I am set up as a limited company, and I am the only employee. I attend client sites at home and overseas where I have multiple subsistence, travel and other expenses. These receipts are submitted to the client who pays them back to me. How do I categorise these these payments?


Who pays them in the first place (you or the company) and who does the client pay the expenses to?

Essentially you would treat them like any other purchase you make and then rebill them to the client ordinarily.


I pay for them and submit single expense sheet to the client who reimburses me (my company) with a single payment. The issue isn’t how to treat it as a purchase, more on how I categorise the payment I receive from them so it goes in the correct bucket and appears correct in the ledger/ profit/ loss account, etc.
Cant seem to identify an appropriate category.


As long as your expenses are categorised to an expense account, and when you bill the client for them, the payment received goes into one of your sales accounts, it will be correct.

If you bill the client exactly the same as what you have paid it will not affect your profit and loss as you will see an identical increase in both gross profit and expenses, resulting in no change to your net profit.

This may not be the case if you’re VAT registered, as there are differences in the way VAT is handled. (IIRC, you don’t pay VAT on a train ticket, but when you rebill it to a client, you do add VAT to the client’s bill).

(Caveat: I’m not an accountant - always check with your accountant. This information is what I have learned reading up on how to do the accounts for my own limited company)

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