Question about business bank account

[turbowoowoo]

i went to cash plus who originally caused my problem, i signed up with companies made simple with a registered office in london. cashplus accepted me but then rejected me because of the fact the office is registered and they see it as a mail forwarding address. so they want me to move my registered address before i can complete the application
wish i got it sorted before starting.
My question was though, if i gave the agency my personal savings account and tell them its my business account, is there a way they would know? just whilst i get things sorted.

What is stopping you moving your registered address to your home address?

[thebigcomputerguy]

its only perilous during the start up, il be picking up quite a bit once sorted, its just the initial payment thats the worst bit. Credit cards are a nono as mine are maxed out

[malvolio]

its only perilous during the start up, il be picking up quite a bit once sorted, its just the initial payment thats the worst bit. Credit cards are a nono as mine are maxed out

Speak to your accountant (and please tell us you have one...). For one thing, an invoice can be regarded as company income, it doesn't have to have been paid. A Director's loan is probably a good interim option to underwrite a temporary personal overdraft.

[Alan @ BroomeAffinity]

I'm not sure the address is an issue. We have clients registered at our address with cash plus accounts.

[TheCyclingProgrammer]

I was going to say if the amount was under £10k then get it paid into your own account and record it in your books as a directors loan (and marking the invoice as paid) but if the agency won't transfer it to a personal account, I guess that's not an option. There's nothing wrong with doing it this way (as long as your books are correct and its under £10k to avoid BIK issues) but I suppose the agency is just trying to cover themselves. Is there no way you can convince them to do this?

If you can convince them, then once your business account is open, you could then transfer whatever is left of the money back (it should be most of it - don't spend it all) and write off the rest of the director's loan by declaring a dividend (assuming there's enough profit from the billings to cover it) or leave it outstanding until there is enough profit to declare one (but certainly within 9 months of your business year end).

[sal]

I'm not sure if this is possible at all, and not ideal, but have you explored an option to go through Umbrella for this contract? Lower take home pay, but obviously you are not prepared to run an ltd.

[d000hg]

There have been questions recently about using a personal bank account for business money, and that was for a dedicated account, not sharing the account between business and personal use. The general consensus (IIRC) was that it really shouldn't be done for a number of reasons.

True, however I thought mitigating circumstances surrounding starting up a company were covered by HMRC using a little common sense, as long as it's clear you're not doing it for personal gain but purely because you didn't have everything properly in place on day 1.

[TheCyclingProgrammer]

True, however I thought mitigating circumstances surrounding starting up a company were covered by HMRC using a little common sense, as long as it's clear you're not doing it for personal gain but purely because you didn't have everything properly in place on day 1.

I agree. As long as any money received directly into a personal account is recorded as a director's loan and the usual rules around director loans are considered, I don't see why this would be an issue for one-off circumstances. Its not the same thing as running your business from a personal account on a continual basis.

[TheFaQQer]

I agree. As long as any money received directly into a personal account is recorded as a director's loan and the usual rules around director loans are considered, I don't see why this would be an issue for one-off circumstances. Its not the same thing as running your business from a personal account on a continual basis.

Well, the question isn't "should I do it?", it's "will the agency know if I do it?" which is a completely different matter.

If you are mixing business and personal funds in the same account, then you need to ensure that it's accounted for correctly, though.

[jmo21]

you could then transfer whatever is left of the money back (it should be most of it - don't spend it all)

Sounds like he will be spending it all pretty quickly and relying on continuing to invoice to make it up.

OP - I hope you are aware that contracts can fall through at any moment. As others have said, with your financial situation it is quite a gamble to start contracting. Of course, you might have had no option or any other job in the first place, but I hope you didn't quit a stable permie job

I'm not sure if this is possible at all, and not ideal, but have you explored an option to go through Umbrella for this contract? Lower take home pay, but obviously you are not prepared to run an ltd.

He is way down the line and too late I think to consider changing. The contract, and all the work he has done has been under his ltd. He needs the money now.