Ltd Company using partnership bank account

System
System Posts: 100,534 🤖 Admin 🤖
edited 12:08PM in AAT member discussion

You may have seen this debated on another accounting website recently but i'm very interested to hear your views/stories on the matter.

Has anyone heard of any penalties or anything imposed on a company for using a bank account that isn't in their name? Or for declaring the bank balance on the balance sheet when it didn't strictly belong to the company?

Basically i'm looking for scary stories to persuade a client that he really does need to get this sorted!

ta
jodie

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Ltd Company using partnership bank account

    Hi Jodie

    I am assuming that the bank account the company is using is in the name of the directors.

    In my opinion, if the company were to get a PAYE compliance review, and it was discovered that the bank account the company was using what is actually the directors' bank account, then this could produce a benefit in kind.

    This is because, instead of the money being banked into the company bank account, it is being placed into the directors bank account. Therefore the directors owe the money to the company, i.e. a loan. This loan should be taxed as a benefit in kind.

    I think you are right to try and persuade the company to have its own bank account, after all it is a seperate legal entity, so it should be treat like one.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Ltd Company using partnership bank account


    Good point :) I like that one.

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