Taking care with your personal bank accounts?

[aubergine]

I'm about to start a limited company (software development, IR35 compliant - I think), and was wondering what care we should be taking with respect to personal bank accounts. I assume that if HMRC come after you they will be checking these also, so what should I do with gifts, cheques for example, or sales of personal items, TVs, bikes etc? How would I be expected to account for these kinds of incoming payments in non business bank accounts?

On a separate note, one of the appealing things about a LC is the opportunity to use my gross and VAT in an offset mortgage account (which is different from my business account). Is this frowned upon? Must all business revenue sit in the nominated business bank account at all times? Or are you free to shuffle it around?

Apologies if these are 'newb' questions, I found some discussion on the second question, but no definitive answer.

(Oh, and hello all )

[TykeMerc]

I don't worry about my personal accounts, if HMRC want to inspect my company books then it's a different legal entity from me so they wouldn't be getting copies of my personal statements.

On the subject of shuffling company money about there's no doubt that's absolutely fine so long as it's between accounts owned by and in the name of the business, if you shuffle it into accounts NOT in the name of the business you could be inviting very difficult questions.
The offset mortgage question has been discussed (look for posts by THEPUMA who is an accountant) and is generally accepted as a grey area. In theory it's possible with some suitable documentation for money to be held in different accounts, but I suspect it's a fairly high risk strategy and you certainly shouldn't do it without a goodly amount of research and specialist advice.

A VERY important thing to remember is even though you might own the company outright, until any money the company holds has been remitted to you via salary, dividends or valid expense repayments with the requisite taxes paid it belongs to the company and NOT you.

Incidentally company structure has nothing to do with IR35 status, that's contract specific and relies not only on the contract wording, but also the way the contract is executed in practice.

[Clare@InTouch]

I'm about to start a limited company (software development, IR35 compliant - I think), and was wondering what care we should be taking with respect to personal bank accounts. I assume that if HMRC come after you they will be checking these also, so what should I do with gifts, cheques for example, or sales of personal items, TVs, bikes etc? How would I be expected to account for these kinds of incoming payments in non business bank accounts?

(Oh, and hello all )

Hello

You should be keeping your personal account totally separate to your business account, and make sure there is a clear distinction between the two. So don't use your business account for paying personal bills for example. As Tyke rightly says you should ensure any money you take from the business is either wages, dividends or repayment of expenses. Many people get into a mess when they start viewing the company and themselves as the same thing, and using funds interchangeably. Think of your company as you would think of any other employer you've had, and you'll be on the right track.

Personal items you sell can be ignored, as long as you're selling them personally and not trading as a business. There's some more (old but valid) information about how HMRC would view it here:

HMRC guides UK eBay traders on income tax ? The Register