Chinese supplier invoice paid by a director
For a genuine company purchase, record the supplier invoice and the director’s payment separately, then record reimbursement against the amount owed to the director. Keep purchase and payment evidence together, and check import VAT entitlement independently. Supplier document queries can be coordinated by Cambridge China Bridge.
Establish that the company bought the goods
Start with the order, supplier invoice and delivery evidence. Ask for the company’s name and address on the invoice, and retain correspondence showing the company ordered the goods for its business. If the invoice names the director personally, ask the supplier to clarify the actual buyer and correct any genuine error. Keep the original and corrected documents. The purchase document guide explains how the documents fit together.
Link the personal payment to the invoice
Company and director finances must be clearly separated, and company accounting records are required. Build a payment file containing the relevant personal bank or card statement entry, transfer confirmation, supplier receipt and an approved reimbursement claim. Record the invoice reference, payment date, currency, sterling amount charged and separately identified fees. Explain any difference between the invoice total and the payment. Use the foreign currency invoice guide for currency accounting.
Record the purchase and the director balance
For a verified company purchase funded by the director, use the following bookkeeping sequence with your accountant. A director’s loan account can track the amount awaiting reimbursement; an expense repayment record can also feed that account. If the invoice is already recorded, clear the supplier balance rather than entering the purchase again. Classify the purchase according to what it is, rather than treating every payment as an immediate expense.
| Event | Debit | Credit |
|---|---|---|
| Record the supplier invoice | Stock, asset, expense or supplier deposit, as appropriate | Supplier payable |
| Director settles the recorded invoice | Supplier payable | Director’s loan account |
| Company reimburses the director | Director’s loan account | Company bank |
Reimburse and reconcile
Keep records of money paid into or taken out of the company. Match the approved reimbursement to the company bank transfer and reduce the recorded amount owed to the director. Check the running balance, including other director transactions, before paying. Company and director balances belong on the annual balance sheet. Refer unexplained differences, personal spending, interest or payments exceeding the supported balance to your accountant before processing them.
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Check import VAT independently
Ask HMRC or your customs broker to confirm the company’s import VAT entitlement separately from the director’s personal payment, including how ownership at import, business use and supporting evidence affect the claim, as discussed in who reclaims import VAT. Ask which import VAT statement or certificate is appropriate and reconcile it with the customs entry. Keep the supplier invoice, personal payment and reimbursement file together as the purchase trail, and confirm what additional import VAT evidence is needed.
Frequently asked questions
Is my personal bank statement enough to record the purchase?
Keep it alongside the supplier invoice, order, business purpose and delivery evidence. The statement shows payment; the purchase documents establish what the company bought.
What if the Chinese invoice is in my personal name?
Ask the supplier to clarify who bought the goods and correct any genuine error. Retain the original and explanation, and ask your accountant to review the purchase before reimbursement.
Do I record reimbursement as another purchase?
For a purchase already recorded, reimbursement reduces the amount owed to the director. Recording another purchase would duplicate it.
Can the company reclaim import VAT if I paid personally?
Ask HMRC or your customs broker to confirm the company’s import VAT entitlement, including the relevance of ownership, business use and supporting evidence. Have the personal payment and reimbursement reviewed separately as part of the purchase records.