My partner and I both have good degrees, and should be able to figure out simple arithmetic, but ...
We work through our own company, which we share equally.
I purchased an item which I will use for both personal and company use.
I suggested that I claim it as an expense and we split the cash equally, as an expense, to get the cash out of the company, where it would otherwise attract a high tax rate.
She claims that I will be getting a free item and she will only be getting half the price of the item.
As I see it, I paid the full cost, and it doesn't matter if that is 1 cent or $1,000,000, we are each getting the same amount, irrespective of what I spent.
She has an advanced math degree (which leaves her with a blind spot for arithmetic & bookkeeping, imo :-).
[Update] can we please stop discussing the legality of this? I am well aware that unless the item is 100% for company use, then I should not be claiming 100% of its value. E.g. it costs £200, and if I am using it 50/50, then I should claim only £100 and that is what I will do. Thank you all for pointing that out; it was my mistake not to state that originally, but I did not want to complicate the question.
Now, back to the arithmetic. Am I in any way swindling my partner if I claim that 50% of the cost, pay 20% personal tax on that, and let the company pay 40% on the remaining half, and offer her half of what I get on expenses?
Can someone please explain to us, as if to a five year old, which of us is correct?
To clarify, this is from my comment to Kate, below:
Is there any way that my partner could lose money (as she imagines) if I claim expenses from the company (at 20% tax to me) and give her half, as oppose to leaving the money in the company (and paying 40% tax if we disburse it as salary or dividend)?