Why the company should not pay your personal bills
The problem of doing so and what to do instead
The company card will happily pay your gym membership or your home electricity bill. That does not make it a good idea.
What actually happens
Every personal bill the company pays is money taken out by you. It is posted to your director's loan account, and if the balance builds up and is still outstanding nine months and one day after the year end, the company pays a Section 455 charge of 35.75% of it. Loans over £10,000 also create a taxable benefit in kind. None of this is saved tax; it is deferred tax with admin attached.
The better route
Pay yourself properly through salary and dividends, and pay personal costs from your personal account. Your records stay clean and your tax position stays predictable.
💡 Good to know: One-offs happen and are easily fixed: tell us and we recode them. The problem is the habit, not the occasional slip.
Not found what you're looking for?
Please get in touch and we'll be happy to help:
Email: You can submit a request using our contact form
Phone: 020 3897 2233
Live Chat: Select the live chat icon on the bottom right