A personally paid business expense needs two separate decisions: whether the company should reimburse the payer and whether the expense qualifies for the claimed tax treatment. Payment by a director or employee does not automatically settle either question. Collect the invoice, business purpose and payment evidence, then ask the accountant to assess the company’s treatment.
Identify the expense and beneficiary
Record who bought the item, who paid, which entity received the benefit and whose name appears on the document. Explain the business purpose in specific terms. A description such as miscellaneous costs gives the reviewer little basis to distinguish company expenditure from private spending.
Keep evidence of payment alongside the supplier document. A card statement can show that money left the payer’s account, but it may not explain what was purchased. Ask for the source document rather than treating a bank entry as sufficient support for every claim.
Keep reimbursement approval separate
Use the company’s expense-approval process and record the authorised amount. Check for an existing company payment or an earlier reimbursement before posting another amount. If the company owes the payer money, the accountant should record that liability clearly rather than assume it was settled immediately.
Assess tax treatment on its own facts
IRAS’s business-expense guidance distinguishes deductible business spending from disallowed items and capital expenditure. The underlying nature and purpose matter. A reimbursement approval is an internal decision, not a tax ruling. GST input tax has its own conditions and should not be inferred merely from a GST amount printed on a receipt.
Example: one receipt, mixed purposes
A director pays for a purchase containing office supplies and a private household item. Identify the components and seek approval only for the company portion. Give the accountant the complete document and explanation. Do not crop away the private item in a way that obscures the original receipt.
Complete the transaction trail
Link the approved claim, accountant’s classification and eventual reimbursement. Confirm that the claim appears once in the ledger and once in the settlement records. Where evidence is missing, keep an exception and seek advice rather than promising a deduction. Retain the final pack so another reviewer can understand the business purpose and treatment.
Related practical guidance
For the surrounding work, see bookkeeping basics, bookkeeping and accounting, company records to keep.
Official guidance: IRAS business expenses.
Help with your company records
For accounting, bookkeeping and related compliance support, contact Raffles Corporate Services at [email protected] or WhatsApp +65 8501 7133. Tell us which records or process need attention so we can discuss the relevant next steps.
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