Limited Company, Personal account and Agency

[keyser666]

Our accountant regulars will be here tomorrow, they'll be able to give to specific advice on this.

Thanks cojak.

[northernladuk]

Wouldn't putting it in your sisters account (and to some extent yours) mean you are getting a personal benefit from the money, i.e. interest and therefore you BIK comes in to play here? And surely your sister getting all your companies money has to fall foul of S660 or deemed a directors loan and even then they will be classed as illegal dividends yadda yadda?

Would be interested to see what our accountants say. Putting your company money in your sisters account just sounds wrong on so many levels.

[tractor]

...

I will sort out and go back to an umbrella my main concern is this moment. There is no illegality here.

Whilst it is not illegal to do what you are doing, it bears all the hallmarks of money laundering and the banks have to show due diligence. In addition, HMRC could take a s455 view and may even insist that your personal account and all the transactions through it should be treated as a directors loan account opening another can of worms.

Also consider if your sister went banktrupt or entered into an administrative arrangement - your money would be treated as hers and you would have the devil of a job to get it back.

[Wanderer]

I should have put it in the OP but any payments that go in I give 25% to my sister to hold for me which will more than cover my CT. As I dont manage money too well she will not give it back until such time I submit. I am not VAT registered.

Your company won't be paying any corporation tax.

You really need to get an accountant to do your books because you are going to end up in a real mess with fines and penalties for making a hash of it all. Also, if you are earning > £25k/year then the 25% you have put aside probably won't cover your tax bill either.

I suggest that you close your company down and switch to an umbrella, they are much simpler and you won't get yourself into a pile of trouble as you have done.

[Contreras]

Wouldn't putting it in your sisters account (and to some extent yours) mean you are getting a personal benefit from the money, i.e. interest and therefore you BIK comes in to play here?

Those were my first thoughts too. In effect the entire turnover has been put beyond the reach of the company.

At best HMRC would want to treat this as salary, so full NI + income tax are due and 25% wont't cover it. Plus the company will be in trouble for not registering for PAYE as an employer.

I can't see it treated as a loan - the money is spent and there is no business account to pay it back to anyway.

It may be possible to treat everything to date as self-employed income. The company could then be wound up cheaply without having traded. Tax and NI would become due, plus possibly a fine for not declaring as self-employed status but still may be the cleanest solution.

You need an accountant to help you out of this mess and you need to start putting aside as much money as possible to pay any tax due, 25% is nowhere near enough imho.

[LisaContractorUmbrella]

Can anyone answer my earlier question as to whether the Agency will be able to send the payment FP/CHAPS with the payee name "my name/ltd company name?" my bank have not said that they wont receive it but are saying because my name was not on it they are not accepting it.

I know the agency will not want all this next time so will go back to my umbrella company cellbrite

Your bank will probably not accept a payment made out to 'mylimitedco' into a personal bank account and I can't imagine the agency will make a payment for an invoice raised from 'mylimitedco' to you personally - there are all sorts of reasons why. I think that you need to accept that you won't get payment today and make some sort of contingency plan - bank overdraft??

With regard to your tax obligations - if you are inside IR35 you will be paying tax through PAYE so you need to establish how much you will owe to HMR&C and put that aside (in your own account and not your sister's) rather than randomly picking on 25%.

I don't know the umbrella company you mentioned but you would definitely be safer with them than with running your own Ltd without an accountant.

Good luck

[keyser666]

Thanks all for the advice seems I have opened myself up to a lot more than I thought

[keyser666]

So have sorted a umbrella and will be paid tomorrow. Any idea what i would expect to receive from the following for last month? Monthly fee is approx £91. This is from last months pay and they wont have a tax code for me either

Pay was £3528

TIA

[northernladuk]

So have sorted a umbrella and will be paid tomorrow. Any idea what i would expect to receive from the following for last month? Monthly fee is approx £91. This is from last months pay and they wont have a tax code for me either

Pay was £3528

TIA

£62.32 if you are lucky. They keep all the half pennies you know.

[keyser666]

£62.32 if you are lucky. They keep all the half pennies you know.

Hardly helpful