Limited company but personal bank account

Hazel Thomson
Hazel Thomson Registered Posts: 11 Regular contributor ⭐ 😼 ⭐
I have a client who started up as a limited company last year but didn't open a business bank account. She slowly bought samples, stock etc through her personal bank account and is selling online, it's not high volume or high value either.

I wasn't given the personal bank account statements but I just started to work my way through the accounts anyway, partly to familiarise myself with the business and also to see how to approach it, however, I have balanced up the accounts and arrive at a small profit and a bank balance of about 1K.

At the end of the financial year she did open a business bank account as advised but there were no funds at start. This means that I need to account for the 1k bank balance at year end, presumably as drawings.

I feel that maybe I should now ask for the personal bank statements and work my way through trying to identify and separate personal and business transactions and arrive at a bank balance that way. Either way I don't think I could be certain that the figure is 100% accurate and as I am dealing with low value the difference is unlikely to be significant.

I would really appreciate any advice on best approach or can anyone tell me how they have approached similar situation?



  • Doug7
    Doug7 Registered Posts: 20 Dedicated contributor 🌟 🐵 🌟
    your client has traded as a sole trader her customers were not aware that she had 1 or 5 limited companies.
    All you need to do is a profit and loss set of accounts and transfer that to a tax return at year end 5th April 2009 This is just a list of income and expenditure balancing the bank is not needed She will be allowed some use of home allowance % of internet
    your client will need a UTR unique tax ref 10 digit no she can reg for this nat ins and tax by phoning hmrc 0895 6070143 newly self employed The general self assessment helpline is 0895 9000444
    The cost of limited company protection in terms of accountancy and insurance may out weigh its benifits
    hope this helps
  • Bluewednesday
    Bluewednesday Registered Posts: 1,624
    We do not know what the client traded as.

    Can you tell us which name was on her invoices? Just because the funds were paid into a personal bank account doesn't mean she traded as a sole trader, what title she used to invoice to and from is what matters.

    As long as she has traded as a limited company, there won't be drawings so you will need to work out how you are going to deal with that (directors loan, wage or dividend) there's no way anyone can advise without knowing the details.
  • Hazel Thomson
    Hazel Thomson Registered Posts: 11 Regular contributor ⭐ 😼 ⭐

    Thank you for your comments.

    It's difficult to write everything and I know there are several issues here, I can probably deal with the others but not happy with being unable to tie into bank account with limited company accounts, although do this often with sole traders.

    My client has registered with companies house, is registered as a limited company with HMRC does have a UTR and has been asked to complete a corporation tax return. I wouldn't like to say the company name, it's not her own name, but she uses ltd after it on invoices.

    I know I would have to account for amount in bank probably as wages. She hasn't actively paid herself anything, she wouldn't have known what was available to take because she has income from other sources going in to the same bank account and didn't think she was making any money from the business yet. So you can see why I'm reluctant to go through her personal bank account searching for business transactions.
  • AK002
    AK002 Registered Posts: 2,492
    You're going to have to go through and analyis the buisness expenditure and income and take it through the directors loan account.
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