Moving monies between bank accounts

Moving monies between bank accounts

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Hi,

I am currently self employed, soon to be a director of my own Ltd Co.

I have always operated one bank account, but I assume once trading as Limited I will need both a business and personal account, should I deal with earnings as follows:

I will pay myself a monthly wage up to the earnings limits, either PAYE or Personal Tax Allowances, not decided yet.

I if I withdraw the NI upper limit earning amount (£464 per month), I will actually be short (so I can cover my mortage and other living expenses) - so my drawings will actually be higher in the first year, so more than £464 will need to be withdrawn into my personal account each month.

I will pay myself a Dividend at the year end - I assume this will go into the personal bank account, and help make up for the following years shortfall, if the £464 is not enough.

Does that all seem the correct proceedure, from a tx inspectors point of view.

Thanks

Replies (3)

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David Winch
By David Winch
04th Mar 2013 14:27

See an accountant

You need help from an accountant.  There is too much to deal with to do it on here.

David

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PAH Accounting Devizes Wiltshire
By Phil Hendy
04th Mar 2013 14:52

Bank definitely

There are a few issues here as David has mentioned. It really would be worth speaking to an accountant.

The first key point mentioned is about a bank account. You don't have to get one, the Company does - a very important distinction between you and the company.

 

Dividends can only be withdrawn if profits are available so you may need to consider your remuneration strategy. Saying you 'need' the money will not wash with HMRC.

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David Winch
By David Winch
04th Mar 2013 15:14

@philhendy

Not to mention potential issues with an overdrawn director's loan account and the forthcoming pleasures of RTI . . .

David

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