Reply to: Statements

[centurian]

I have transfered money from my business account to another account (to get better interest), however the acccountant is asking to see statments from that account also. As its a current morgage account it has some personal transactions on it and Im not going to be giving the accoutant copies. The money I transferred is still in the company so its not a loan or dividend, just moved. What happens if I dont provide them?

At worst, they could refuse to do the accounts and ask you to go elsewhere.

However, they probably won't want to turn away the business, so they will likely do everything possible to ensure that they are exposed as little as possible. Expect a caveat to be added to the return which will cover themselves while drawing maximum attention to the fact if Hector reads it.

In future, also expect them to start advising the most risk adverse tax strategies (i.e. highest cost to you).


Put yourself in their position. In order for them to fully understand the financial situation, they need to see all the evidence of the company's assets. If a client deliberately witholds that evidence, they will be extremely wary in your dealings. The client could be money laundering / drug dealing / terrorism in that account for anyone knows.

[tim123]

Its my company where I put the money is my business,

No it's not, there are laws that you have to obey,

and if you break those laws, it does become someone elses business

tim

[malvolio]

Dunno. Perhaps you should ask your accountant.

Another minor detail. If he suspects you are not giving him all the data he needs to do his job properly, he will cover his own ass by shopping you to Hector. So stop being so bloody precious and answer his questions - which he is entirely right to be asking. From where he sits right now, you are either doing some money laundering or practising tax evasion, neither one of which he will be comfortable with..

[DS23]

so, how big is this dividend that you've given yourself?

[northernladuk]

As someone pointed out very well to me when I asked a few questions about personal/company grey areas. You have to start thinking like its a company and your a director. Compare it to other LTD companies and apply the same situation and see what comes out..

For example...

You work for a large LTD company. Would it be acceptable for one of the directors to pillage the companies spare money to pay off his mortgage and then give it back when he feels like it?
The company is loosing interest in the money
The director is saving money
Is that acceptable. Absolutely not, so why is it with your company?

I havn't unfortunately worded it as well but the theory behind this way of thinking is sound and has helped me work out many company/personal issues.

Start thinking like a Director of a company not like its all yours.
Hope that helps

[Bunk]

Indeed. I wasn't trying to be an @rsehole with those questions earlier. It's just a lot easier to understand if you realise the difference between your money and the company's money. To get the money out of the company and make it your money something needs to happen - salary, dividends, expenses or a loan. You can't just transfer it around as if it is your money. It isn't, yet.

Actually, a loan doesn't make it your money either, so best ignore that.

[Bunk]

I have told them, they are doing the annual return which is why it came up.

Thanks for the advice.

Might go back to umbrella this is a pain in the arse.

Indeed. I wasn't trying to be an @rsehole with those questions earlier. It's just a lot easier to understand if you realise the difference between your money and the company's money. To get the money out of the company and make it your money something needs to happen - salary, dividends, expenses or a loan. You can't just transfer it around as if it is your money. It isn't, yet.

[Pondlife]

I have told them, they are doing the annual return which is why it came up.

Thanks for the advice.

Might go back to umbrella this is a pain in the arse.

They should let you know what your options are.

As for going back to a brolly. Running a Ltd is fine as long as you don't get tempted to spend that big pot of gold that really belongs to the tax man or vat man.

Think of it as money you owe the big drug dealer you do supplies for and the kicking you'd get if he caught you skimming.

[Diestl]

Tell your accountant as they most likely think it's in another business account. They will advise on whether/how you can classify it as a loan.

I have told them, they are doing the annual return which is why it came up.

Thanks for the advice.

Might go back to umbrella this is a pain in the arse.

[Pondlife]

It more than 5k not sure what to do now! I fI pay it all back is there any extra tax to pay?

Tell your accountant as they most likely think it's in another business account. They will advise on whether/how you can classify it as a loan.

Depending on amount and date you may be better off declaring it as a divy depending on how much you've paid out already.

[DaveB]

Its my company where I put the money is my business, as long as I pay the tax whats the issue?

As long as the money exists somewhere and the tax is paid I don't see an issue. So you are telling me business dont move money to other bannk accounts?

It's not your money, it's the companies money. Putting it anywhere but in a company owned account equates to removing it from the company and it has to be accounted for as such.

By putting it in a personal account you have effectivly transferred the money into your hands and so you become liable for Tax/BIK/Penalties that arise as a result.

With no dividend declaration and no accounting for it as a directors loan, especially if it is over £5000, you are going to have to be *very* careful Hector does not just class it as a payment and tax you accordingly.

It sounds like your accountant is at least trying to cover your arse for you by accounting for where the cash has gone and making sure interest earned on it is accounted for in the appropriate returns.

[Diestl]

It's fine to have multiple business accounts to take advantage of higher interest (MyCo does). It's not fine to take money out of YourCos accounts without ot going through the books. The money paid to you is either a loan, a dividend, salary or expenses.

It this case it's most likely a loan, which if less than £5K is fine as long as it's paid back by year end. Anything else is classed as a BIK to you personally and therefore tax is due. Your company is a separate legal entity to you and I would strive to keep that as distinct as possible.

It more than 5k not sure what to do now! I fI pay it all back is there any extra tax to pay?

[Bunk]

As long as the money exists somewhere and the tax is paid I don't see an issue. So you are telling me business dont move money to other bannk accounts?

You are gaining the personal benefit of paying less interest on your mortgage due to the company's money being in your personal account. How many businesses do you know would allow their employees to do that?

[Pondlife]

As long as the money exists somewhere and the tax is paid I don't see an issue. So you are telling me business dont move money to other bannk accounts?

It's fine to have multiple business accounts to take advantage of higher interest (MyCo does). It's not fine to take money out of YourCos accounts without ot going through the books. The money paid to you is either a loan, a dividend, salary or expenses.

It this case it's most likely a loan, which if less than £5K is fine as long as it's paid back by year end. Anything else is classed as a BIK to you personally and therefore tax is due. Your company is a separate legal entity to you and I would strive to keep that as distinct as possible.

[Spacecadet]

As long as the money exists somewhere and the tax is paid I don't see an issue. So you are telling me business dont move money to other bannk accounts?

They do but those are other business bank accounts, not the MD's personal mortgage account