Using a separate personal account for a limited company

[TheFaQQer]

This wasn't my point - the point is you AREN'T worth that £20k, your company is. It's not yours until a salary or a dividend has been paid. So what happens exactly if you do end up in a divorce or a child maintenance situation and everyone thinks you're up by 20k?

I'm sure there's ways to prove it, but it's not a situation I'd ever fancy being in myself. Far better to know the companies money is safely ring fenced both legally and logically.

With the new HMRC powers to take money from your bank account, I'd want a clear separation of assets that were mine and my companies to ring fence that money.

It would be ironic if (for example), HMRC decided that because you've sold your personal debt to the company via the dodgy forex loan scheme you were in, you owe back tax. They take the money from the account in your name which actually isn't yours, and you then don't have the money to pay HMRC the corporation tax and VAT money that your company owes you. Then, because you acted negligently, they come after you personally for the money...

[ASB]

If you just want to do it to save a few quid then not worth it. If you have to do it for some reason then your case is better. But there are issues.

- a correctly esecuted deed of trust can establish that as the individual are legal owner, but co is still beneficial owner.

so, job done. Or is it?

- in this day of money laundering it may be the case that there is a "and I am beneficial owner" clause in the account. This would give a pretty obvious problem.

then there is the question of income tax on interest. The bank should deduct from personal. But not from corporate.

I guess you could try a personal account of "fred nominee for fred ltd".

So it is not something to be done lightly, and only having clarified what you are planning woth your accountant. It gives them a potential headache.

If it is genuinely the only way you can realistically arrange things then so be it.

[ndoody]

If you just want to do it to save a few quid then not worth it. If you have to do it for some reason then your case is better. But there are issues.

- a correctly esecuted deed of trust can establish that as the individual are legal owner, but co is still beneficial owner.

so, job done. Or is it?

- in this day of money laundering it may be the case that there is a "and I am beneficial owner" clause in the account. This would give a pretty obvious problem.

then there is the question of income tax on interest. The bank should deduct from personal. But not from corporate.

I guess you could try a personal account of "fred nominee for fred ltd".

So it is not something to be done lightly, and only having clarified what you are planning woth your accountant. It gives them a potential headache.

If it is genuinely the only way you can realistically arrange things then so be it.

Thanks, so essentially...it's a grey area that technically you *might* get away with if there was good justification. And like tax avoidance schemes, people are getting away with it year on year but the HMRC hasn't decided to crack down on them *yet*.

I think I can easily agree with this, because yes you're right HMRC are not going to accept money saving as a reason.

Oh well, it was just an idea going through my mind...when you see all these attractive offers for personal accounts that would make money just sitting there earn more and with a business account you seemingly get shafted on every transaction.

[northernladuk]

Thanks, so essentially...it's a grey area that technically you *might* get away with if there was good justification. And like tax avoidance schemes, people are getting away with it year on year but the HMRC hasn't decided to crack down on them *yet*.

I think I can easily agree with this, because yes you're right HMRC are not going to accept money saving as a reason.

Oh well, it was just an idea going through my mind...when you see all these attractive offers for personal accounts that would make money just sitting there earn more and with a business account you seemingly get shafted on every transaction.

Don't wanna be rude but I would advise a bit more professional attitude to your business and learn to keep personal and business completely separate. Thinking like this is just going to end up screwing yourself over royally in the future.

[tractor]

...

lol, I would never try to devoid my children of getting all the money and support they needed whether I was with my partner or not. I'm not sure I see any other situation in which I have to prove I'm worth less, as I'm not *generally* trying to do anything I shouldn't.

I don't see why you'd have to make any adjustment to an invoice, except for the sort code and a/c number. I could put pay to "rumplestiltskin farted in my face" as long as the a/c number and sort code are correct.

You cannot.

There are 3 things that need to be correct for a payment to be guaranteed and within the bounds of the AML regulations; the account name, number and sort code. However much you disagree with it and want it to be different, it is a fact.

Additonally as has already been pointed out, HMRC would treat the whole lot as a director's loan. The point being that you personally have access to it.

[ndoody]

You cannot.

There are 3 things that need to be correct for a payment to be guaranteed and within the bounds of the AML regulations; the account name, number and sort code. However much you disagree with it and want it to be different, it is a fact.

Additonally as has already been pointed out, HMRC would treat the whole lot as a director's loan. The point being that you personally have access to it.

Have paid, for many years and continue to do so to this day, into one of the wifes bank accounts without her name in the payee field. Only the sort code and a/c number is correct on this account, has always made it easier to distinguish it from her main bank account and give me an indicator of what it's for. And I'm talking about the payee name specifically, but neither does the reference incidentally. Never once had a problem paying money into that account...

[Scruff]

After all this, I am yet to understand what your intention is? Are you trying to save £10 per month bank charges? If it's to earn a higher interest rate then you could invest this in a wholesale money market account, or other instruments which are done in the Company name?

[DiscoStu]

Have paid, for many years and continue to do so to this day, into one of the wifes bank accounts without her name in the payee field. Only the sort code and a/c number is correct on this account, has always made it easier to distinguish it from her main bank account and give me an indicator of what it's for. And I'm talking about the payee name specifically, but neither does the reference incidentally. Never once had a problem paying money into that account...

You've asked a question, been advised against it by everyone in this thread including three qualified accountants, and you still want to argue the toss?

[ndoody]

You've asked a question, been advised against it by everyone in this thread including three qualified accountants, and you still want to argue the toss?

Challenging a factual fact with a factual even that factually happened...

[tractor]

...

Challenging a factual fact with a factual even that factually happened...

"There are 3 things that need to be correct for a payment to be guaranteed and within the bounds of the AML regulations;"

Which part was wrong? If one of your deposits went astray, your bank would say 'tough, you got it wrong' and it would be up to you to try to sort it out. They may help, they may not but I doubt they are obliged to. Secondly, your payments would not be compliant with AML regulations and your bank may find itself in trouble if they were audited too.

So whilst yes, I can walk blindfold across the M25 at lunchtime, it might not be a good idea.