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Can Director pays

Can directors pay from personal account for their company's supplier invoices?

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Can a director use his personal bank account to make payment to the suppliers of his company? If so, does the supplier need to perform any further verification for money laundering etc?

We are the suppliers receiving the payment. 

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By Accountant A
15th Jun 2020 18:16

'poih'

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Psycho
By Wilson Philips
11th Jun 2020 23:04

He can, but I would advise against it. It can only serve to encourage him to forget that he and the company are separate entities - with the inevitable headache of having to unravel a director’s loan, explain why the company has additional tax to pay etc etc etc.

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By Truthsayer
11th Jun 2020 22:43

1) Yes, but it's better not to. However, that won't stop stupid clients doing it, no matter how often they are told.

2) No

Why are you posting this anonymously?

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By jvenegas16
12th Jun 2020 00:21

Why isn't he transferring the money from his personal account into the company's bank account to cover the payment of those invoices? It is cleaner and clearer. Then he will be able to take back the money lent to the company.
If it is a temporary situation because the company bank account is not yet opened or something similar, it should not be a problem, otherwise things get messy, and other issues may arise even with the bank or raised by the bank, based on the way the account has been used.

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By Tax Dragon
12th Jun 2020 07:21

He can use his money to pay my suppliers' bills if he wants. (If they are business invoices, I suspect I might have to forego the VAT and tax relief, but why would I care? The whole bill's been paid! Of course, if he expected me to give him the money back later, that's different. You don't say.)

Only a few suppliers need to do AML, accountants obviously being among that group.

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By tom123
12th Jun 2020 10:24

I would generally not care where my customers money had come from, but (if it was a sales ledger payment) I may struggle to reconcile the amount received - as it would presumably give his personal details as the sender on my statement.

If the payments were credit card, then I would neither know nor care whose card it was.
(assuming I have the correct routine to match up my funds received)

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By Paul Morton
12th Jun 2020 10:29

I would also say that his personal bank account/credit card will become part of the statutory records. HMRC would certainly see it this way.

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By pauljohnston
18th Jun 2020 10:35

Very easy to judge however if the Company Account is at its limit or beyond then paying money in to it wont get the bills paid. As present it is taking forever to open a Company Bank Account
If the director has poor credit history some banks wont take him on.
If bills have to be in cash because that is the nature of the business eg Market Trader this can cause problems
There is no statutory requirement to have a Co Bank account but I always recommend that one be used.
For those clients who have had a bad credit history and cant get a company bank account I recommend that the director use a new personal account to make the payments from so that we can sort out the mess at the end of the year.
If it is poor credit history I suggest cashplus.com as they will give an account to most

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