When you buy something from a private individual for your business, whether it is a car, laptop, phone, or printer, there are a few important rules to keep in mind to make sure the purchase is correctly handled in your accounting.
This article provides general guidance only. Tax rules may vary depending on your individual situation. When in doubt, ask your Tax Coach.
No VAT on purchases from a private individual 🫤
When you buy something from a private individual, they cannot charge VAT. Even if the seller still has their original purchase invoice, you cannot recover VAT on that transaction as a self-employed person. Private individuals are not legally permitted to charge VAT, which means the purchase is always VAT-free for you.
It still counts as a business expense 🤑
Whether you buy from a supplier with a company number or from a private individual, both purchases count as expenses in your accounting. What matters is that you have a supporting document in case of a tax audit. Together with the seller, you need to draw up a document containing the key details: the seller's information, a description of the item purchased, and the price.
No proof of purchase means no entry in your accounting 🚫
Always make sure you have a valid proof of purchase. A bank statement showing the payment to the private individual is not sufficient on its own. In the event of a tax audit, a detailed proof of purchase is required to record the cost correctly in your accounting.
What if you buy something from yourself? 🤔
In some cases, you may buy something from yourself, for example if you purchased an item before starting your self-employed activity. In that case, make sure the item is used for your business and is recorded in your accounting. The same applies if you have already started your business but your company number is missing from the invoice.
No need to worry: the purchase can still be correctly processed in your accounting.
Need help? Chat with us or email support@accountable.eu, we're happy to help.