Friend paying wages into my bank account.

davesweb1206

(Sorry if this is in the wrong forum?)

I have a dilemma that I need advice with.

A while ago, a friend started work - he didn't have a bank account and asked me to if he could use my account to pay his money in while he gets it sorted.

I had a dormant account which I allowed him to pay into.

However, its now been almost a year he's been using the account, I've asked him to get his own account and he's saying he can't as his credit file is really poor.

My issue is I have started running my own business, and I'm worried about the implications of having to declare an income that is not technically mine, but looks as if it is mine on this account.

Obviously I don't want to put a friend out but nor do I want to pay any tax on his income, so I was wondering, is there a way I can allow him to use the account without the tax office questioning that 'income' or is it best allow round to get him off my account?

Any help or advice!

Thanks,

Dave.

Svenena

Tell him to get him to get his own account. Anyone can get a basic bank account, no credit checks required, and then he can get his wages paid into that.

There is no way I'd let someone else use one of my accounts - what if he went massively overdrawn and incurred loads of charges? YOU would be responsible for paying it all back, and YOU would be the one with the damaged credit report.

ETA: There's an article about basic bank accounts on this site. You might like to direct your friend to it: http://www.moneysavingexpert.com/banking/basic-bank-accounts

NFH

You won't be taxed on his income, as it's not your income but his. In any case, HMRC will not check your bank account unless you're investigated, and if they do, you have a perfectly plausible and verifiable explanation for his income being paid into your account. This is a non-issue from a tax point of view.

p00hsticks

davesweb1206 wrote: »

I've asked him to get his own account and he's saying he can't as his credit file is really poor.

There's not really going to be much opportunity for it to get much better though if he's using someone elses account though, is there ?

You must tell him to get one of his own - there are potential implications to you of him using your account in this way, in terms of tax issues, potential money laundering accusations, your credit record and the impact on any benefits you may need to claim.

heretolearn_2

Basic bank accounts can be opened with a bad credit rating.

I wouldn't be happy with this situation long - term. There's so much scope for problems. Use the business as an excuse if you like, but it's time to stop. He CAN get a basic account if he wants to. If he won't, not your problem.

johnmoney05

Just pocket it. Go shopping....then your friend will get his own account very soon.

Cmdr_Bond

Take him into a bank (yours if necessary) and sit there with him while he opens a basic account and transfer his funds directly into it.

Next question, You said the account WAS dormant until you let him pay into it... what other access does he have to it? Does he use your cash card/debit card, have direct debits/standing orders set up?

If he does it may be better to set up the new account by going into a different bank, and switching the account to them and putting it in his name.

You will not have a leg to stand on if he wipes out the account and leaves you to foot the bill.

ironlady2022

I would definitely not allow him to continually pay in the salary. Regarding the income that is not yours, HMRC will only question this under investigation but still if that ever happens, it's a lot of messing about and explaining to do.

ANYONE can get a bank account even with a poor credit history, try the Coop CASHMINDER, as long as he has the right ID, then it will be physically open within 3 working days. He has left it this long as he is lazy and you have let him do it. If he does not agree, I would empty the account, keep the receipt and close the account. Then you can ask him to come round to collect the monies. This would be easiest way and most efficient, I wouldn't even care about upsetting him as you've let him use it long enough.

Umbrellaboy

You should arrange for your friend to withdraw funds/stop using the account immediately.

By allowing someone else to have wages paid into your 'personal' account actually constitutes a breach of T&Cs and if discovered by your bank (which can and has happened) could cause you a lot of grief, not least a fraud marker being put on any accounts you hold but also your credit rating being affected.

There is absolutely no reason why this person shouldn't have their own account unless they have a previous history of fraud in which case they may not even get a basic account.

ironlady2022

If it is fraud even more reason to kick your friend off

patman99

I guess the OP will do like most others do when presented with such sensible answers, ignore them. I will however say that a couple of (former) work mates of mine had more-or-less the same arrangement. One now owes the other a not inconsiderable sum of cash, but is unlikely to pay it back.