Living off your Business Bank Account

[convict]

The easiest way to find out is to fill out the form here and watch what happens...

And don't forget to post back with the results

[Sockpuppet]

DLC?

There are only certain types of things you can expense on your business, last time I looked into it. Are you saying it's perfectly OK to put your entire life expenses through your IT Contractor Business Account, so long as you account for the expenses properly?

Directors load account. Not really sure why I always abbreviate it to DLC many because its directors load control account in sage.

It is OK to put what ever you like through your business account. As long as everything that isn't a business expense is paid for or claimed on your P11d you can do as you like. As pointed out above through a really crap idea.

[Wanderer]

I understand that, but this is assuming you account and report them, and pay taxes on them, things that he doesn't do, and I am just wondering what the consequence of this would be if he gets investigated (unlikely though I suppose).

He would have to pay the tax owed, plus interest and a penalty of up to 100% of the tax owed for deliberately under declaring his income or claiming expenses which were clearly not allowed.

Does he not have an accountant then? How can you be sure that his accountant doesn't just square all this BIK/directors loan up at the end of the tax year?

[Martin at NixonWilliams]

Does he not have an accountant then?

I hope not!

One unlikely possibility is that he may not be withdrawing his salary, dividends or expenses and is simply offsetting his personal outgoings with the amounts owed to him.

This is clearly bad practice, it is the only plausible way this arrangement could work without a loan arising.