Transfering money to bizz account to prevent fees?

WOODWOOD

Hi,

The free period on my biz bank account is coming to an end soon and I'll have to pay a fee if I don't pay in £1000 per month.
That would be most months at the moment as I normaly pay in under £1000.

I could just transfer £1000 in from my personal account every month and back out again so I didn't get charged the fees but how would that work from an accounting point of view, would I have to put it down as takings each month and then would I keep getting taxed on the same £1000 going in and out?

Thanks,
Dave.

newmoneysaver2012

Hi, what Bank is it you bank with [out of interest]
and what are the fees?

WOODWOOD

Hi, it's with Lloyds.

I think the fees are a monthly one and then for paying cheques in, can't be sure as not at home at the moment. I'll probably change soon anyway but for now just wanted to know what would happen with the thransfering £1000 in and out.

Thanks.

theesel1994

WOODWOOD wrote: »

Hi,
I could just transfer £1000 in from my personal account every month and back out again so I didn't get charged the fees but how would that work from an accounting point of view, would I have to put it down as takings each month and then would I keep getting taxed on the same £1000 going in and out?

Thanks,
Dave.

The money you transfer in could be put as "capital introduced" and then when you take it back out as "drawings". You are only taxed on the profit a business makes.

heathcote123

WOODWOOD wrote: »

Hi, it's with Lloyds.

I think the fees are a monthly one and then for paying cheques in, can't be sure as not at home at the moment. I'll probably change soon anyway but for now just wanted to know what would happen with the thransfering £1000 in and out.

Thanks.

There is no tax liability generated, just a loan (and reversal) to the company if you like - I guess you could make a note of that in your accounts, but it's very easily explainable (and legitimate) if the taxman ever asks.

But if you're running a business and you have to ask that, please please get an accountant.

WOODWOOD

Thanks Heathcote123 and Theesel1994

I thought it would be the case that it would be a loan to the business and I'd record it seperatly to takings.

Where would that be declared on the Tax Return? I don't remember a box for loans. Or would it not need to go on there?

Thanks.

heathcote123

WOODWOOD wrote: »

Thanks Heathcote123 and Theesel1994

I thought it would be the case that it would be a loan to the business and I'd record it seperatly to takings.

Where would that be declared on the Tax Return? I don't remember a box for loans. Or would it not need to go on there?

Thanks.

My accountant does mine, so I don't know for sure, but I don't see any reason why you would need to fill it in on a tax return, unless the balance of the loan needs to be taken into account past the end of the tax year. - ie just make sure it's repaid before march 31st or whatever.

theesel1994

WOODWOOD wrote: »

Thanks Heathcote123 and Theesel1994

I thought it would be the case that it would be a loan to the business and I'd record it seperatly to takings.

Where would that be declared on the Tax Return? I don't remember a box for loans. Or would it not need to go on there?

Thanks.

It's not declared on the tax return so doesn't matter when it is repaid. It only affects the balance sheet, not the profit and loss account.