Pay bills from buisness account or pay myself ?

roryp15

Im just go through the process of registering self employed and now have 4 bank accounts, Personal, Joint, Buisness ( all RBS ) and my savings account.

Now obviously my " pay " or money i earn will go into my buisness account. Every month i normaly pay money from my personal account into savings and the joint account.

Now that i have my buisness account should i " pay myself " enough money for me to then trasnfer to joint and savings and have " play money " for the rest of the month.

OR

Should i pay my joint account, savings, and personal ( for play money ) all from my buisness account.

I was just thinking should the tax man ever want to see bank statements im not wanting him to see regular payments going to diffrent bank from the buisness account as it isnt relivent to the buisness if that makes sense?

What do i do ?

Gromitt

I'd say its much easier to explain "I withdraw £x per month from my business for my monthly salary" than explaining each non-business expense from your business bank account(s).

Of course, if you work from home, then you can claim for your lighting, heating and electric during your working hours as a business expense, but it starts getting really confusing and complex very quickly, so much easier to get an accountant involved, and they'll tell you the 'tricks' of the trade, without you getting sued for tax evasion.

roryp15

So i should pay money from my buisness account into my personal account then from personal account into joint / savings and money to last me the rest of the month then buisness is just all buisness and only one monthly payment to myself every month

Gromitt

Thats what I would do, yes. Easier to manage, easiest to explain.

Unless of course you want to pay for an accountant and ask their advice. If they are wrong, you can sue them

InsideInsurance

Are you a sole trader or Ltd?

Assuming you are a sole trader then all the monies are yours and it is totally up to you how you want to organise. Most find it easier to organise it as you say to keep a clean set of business records making it easier to do your SA return but ultimately HMRC can ask to see all bank accounts and you get taxed on all profits irrespective of what you transfer out of the business account or leave in it