Personal bank account?

[floehopper]

I've just started freelancing via my Limited Company and I want to issue my first invoice. I don't yet have a company bank account. Can I accept payments into my personal account and then transfer the money in the company account when it's set up? Or would it be better to (a) ask to be paid by cheque which I could pay into the company account when it's set up; or (b) delay issuing the invoice until I have the company account set up?

Thanks.

[Pondlife]

I would go for the cheque or delayed invoice option.

Only trouble can come from blurring the distinction between personal and company cash IMHO.

[pmeswani]

I've just started freelancing via my Limited Company and I want to issue my first invoice. I don't yet have a company bank account. Can I accept payments into my personal account and then transfer the money in the company account when it's set up? Or would it be better to (a) ask to be paid by cheque which I could pay into the company account when it's set up; or (b) delay issuing the invoice until I have the company account set up?

Thanks.

Personally, I would have got this sorted prior to Day 1 of your contract.

[BolshieBastard]

I've just started freelancing via my Limited Company and I want to issue my first invoice. I don't yet have a company bank account. Can I accept payments into my personal account and then transfer the money in the company account when it's set up? Or would it be better to (a) ask to be paid by cheque which I could pay into the company account when it's set up; or (b) delay issuing the invoice until I have the company account set up?

Thanks.

Nope. The bank wont accept a company cheque into a personal bank account.

[contractreviews.co.uk]

Hi Flowhopper,

It is possible but not recommended as you should always keep your business income separate from your personal income.

However, if you do need to get paid and you can prove that you have indeed set up your company and are the sole owner and director of the company, you can ask to be paid in your personal bank account.

It will be up to your client to accept to make the payment. You should normally give, as the director of the company, an undertaking discharge your client of any further liability in regards to this payment.

Normally, I would not recommend for anyone to go down this route as there should be a clear division between your and your company’s finances.

But in any case I recommend you open your business bank account asap and make sure to get all future earnings transferred in this.

Hope this helps.

Mardi

[Bengal]

If I was the company payiong you, I would refuse to make a payment to you personally particularly where the contract is with your limited company. If the company makes the payment direct to you, as far as HMRC would be concerned, is that the company has a contract with you personally and then you are into the usual employed v self-employed arguements which leaves the company at risk.

Even though as contractreviews.co.uk suggests giving an undertaking, HMRC will pursue PAYE, and employees and employers NIC from your client. Then should your client look to recover the money from you they can only recover the PAYE and employees NIC, this is of course you are still in contact with the company. I would say, not good for business this approach, you want to keep your client's sweet and not create potential difficulties in the future for them.

Suggest delay invoicing and get company bank account set up urgently or invoice now and get a cheque and hold the cheque until bank account is opened (cheques - if I remember can be banked up to 6 months after the date it was issued).

[TheCyclingProgrammer]

Surely the contract is what counts here, not how you've been paid? It seems a bit of a leap to say that just because the money has gone into your personal account that you were in an employment relationship.

I understand its a good idea to keep your personal/business payments separate but as long as its all accounted for correctly, the invoice is raised in your company name, your contract is solid and you transfer the received payments into the business account once its opened, I can't see why you'd have a problem.

Really can't see why it would be a problem as long as you always treat it as your company's money and not yours.

Another possible alternative would be to debit the payments to the director's loan account (assuming they are less than £5000) then when the payment is moved into the business account, transfer the balance from the directors loan account to the business account.

[moorfield]

Personally, I would have got this sorted prior to Day 1 of your contract.

+1

I'm surprised actually that an agency is dealing with you, without a bank account. The better ones I would expect to check this as part of their own due diligence on you.

But to answer the original question, I would just put the invoice on hold until it's sorted. Most of the thicko pimps don't know what a cheque is these days.

[SueEllen]

It will take you a day to set up a Business Account if you have a clean credit record. (I can't remember if they give you your account number as soon as you have opened your account but lots of banks do.)

All you need to do is phone them up and ask what ID you need to take with you, get the ID, then go to a business banking branch and ask to open an account. They should give you an appointment the same day (normally within an hour) and you can open your account there and then.

You can then set up an account with someone else and ditch them if you later wish to.

[Sausage Surprise]

Ask for cash