Money received before going limited

Client has received income into business account for services before going limited

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I have a client who went limited on 1st August, however they have received income in their business account for services carried out before going limited. How would these be accounted for in the new limited accounts?

 

Many thanks in advance

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By David Ex
20th Aug 2021 15:53

Who contracted to provide the services? Looks like self-employed income absent more details.

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Replying to David Ex:
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By Bookbuddy1298
20th Aug 2021 15:57

The services were from when the client was self employed. I believe the income received into the ltd bank account for these services can be treated as director loans and can be repaid to the client's personal bank account. The tax implications will be for the self employed self assessment.

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Replying to Bookbuddy1298:
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By David Ex
20th Aug 2021 16:07

Bookbuddy1298 wrote:

The services were from when the client was self employed. I believe the income received into the ltd bank account for these services can be treated as director loans and can be repaid to the client's personal bank account. The tax implications will be for the self employed self assessment.

So the client has effectively lent self-employment earnings to his newly formed company and now wants to withdraw those earnings? Perfectly permissible, I agree with you.

Obviously ensure supporting evidence is retained.

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Replying to Bookbuddy1298:
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By Leywood
20th Aug 2021 18:11

How can they have a limited cvompany bank account before the limited company is formed?

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By Paul Crowley
20th Aug 2021 16:10

So what you mean is that the money went to the company account?
Surely he had a business account as a self employed trader

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Replying to Paul Crowley:
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By Bookbuddy1298
20th Aug 2021 16:16

There was only a few days in the crossover between self employed and limited company, the invoices are sent and paid in a week and the SE work happened at the end of July and was paid at the beginning of August when the limited company went live.

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By SXGuy
20th Aug 2021 18:37

Find it unlikely any money went in to the companies bank account before incorporation for the simple fact you can't have a business account in the company name without an incorporation certificate.

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RLI
By lionofludesch
20th Aug 2021 20:28

I agree that what actually happened in unclear. A company receiving money before incorporation is implausible.

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By Justin Bryant
23rd Aug 2021 14:53
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By Leywood
23rd Aug 2021 15:09

Not the same issue.

The OP seems to suggest the company had a bank account prior to inception.

Not possible. (Ok possible for corporate deals ahead of completion, but not accessible until the point of said completion).

Unfortunately the OP, as per, has wandered off.

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By Matrix
20th Aug 2021 21:19

I take it your client invoiced in the name of the limited company and provided the limited company bank details. However if it is self employment income then treat it as such and book to DLA.

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