Hi
A new client running a company approached for his first year accounts but he did not open company's bank account and trading through his personal bank account.
How can we show his personal bank account in company's books of accounts and is there any tax implications?
Thanks in advance
Regards
Replies (9)
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similar thread
can be found here:
https://www.accountingweb.co.uk/anyanswers/question/limited-company-pers...
If you have the energy to read that thread good luck to you.
The simple answer is of course no you can't show the director's bank balance on the company's balance sheet as if it belonged to the company.
You put the company's receipts and payments in the personal bank account through the DLA. If there are more receipts than payments the DLA will be overdrawn (if there is nothing else in it of course) and there will be tax issues to deal with.
Not again
Ditto John, except to replace his typo in sentence 2. Replace the first 'it' with 'if'.
Typo
Ditto John, except to replace his typo in sentence 2. Replace the first 'it' with 'if'.
Agreed. Typo corrected now.
Cooperative bank
When the above bank was facing financial problems the directors of one of my ltd co clients transferred a large single lump sum into Barclays. The account is in their personal names. They did this to protect the company's assets. I am hoping that HMRC will agree.
Why?
When the above bank was facing financial problems the directors of one of my ltd co clients transferred a large single lump sum into Barclays. The account is in their personal names. They did this to protect the company's assets. I am hoping that HMRC will agree.
Why didn't they transfer it into a company bank account which could have been set up a few weeks time?
The company could have charged an appropriate rate of interest on the loan in the time the money was in a personal account.
There doesn't seem to be any reason for keeping the money in a personal bank account for an extended period of time.
And . . . . um . . .
They left it in a personal account for how long?When the above bank was facing financial problems the directors of one of my ltd co clients transferred a large single lump sum into Barclays. The account is in their personal names. They did this to protect the company's assets. I am hoping that HMRC will agree.
Peter
Thank you Peter. I only became aware of situation when I came to prepare year end accounts.
andy.partridge
Please don't ask .................
June 2013 and was still there when I started preparing accounts August 2014.
I am assured it has been transferred back into ltd co but still waiting evidence.
I am going to have a meeting next week and spell out tax implications.