When you start your business you may want to transfer some of your existing personal assets into your company. This is straightforward, as long as you take a pragmatic view of the value of the assets.
If you have an asset that was originally purchased for personal use you’ll need to establish the current market value of the asset. You cannot claim the full value of the asset unless it was purchased solely for use by your new business. A straightforward method to establish the value of a used asset is to research the second hand market – eBay is a simple way to do this.
1. Prepare an invoice
Once you have determined the value of the asset, you need to prepare an invoice from yourself to your company listing the items and cost of each separately.
A simple invoice created using a word processor or spreadsheet will suffice, you just need to show on the invoice
- your name
- invoice to (your company)
- invoice date
- the items
- their costs
If you have the original purchase receipts for the item, it is useful to attach them to your company records.
2. Transfer the money
You can then transfer the money for the items on your invoice from your company account to your personal account.
3. Enter the transaction in bookkeeping
Then finally you need to enter them into your bookkeeping screen. Click on the Enter new transaction then Asset purchase and enter the details. You will need to select zero-rated for the VAT category.