Corporation Tax Return for Ltd Company with Personal Bank Account

azhuzhu2010

What should I do now if I have been running a limited company in the UK for a year with my personal bank account?

OK, I know this is a mistake now. But back to the time when my company was registered, I was a student with totally no understanding of the real world at all. I have read people saying it can affect my personal tax rate, resulting me paying high national insurance. What is the best thing to do now to get out of the situation?

CKhalvashi

The best thing ideally to do is going to be to sit down with an accountant for advice; not a tax assist-style company but a proper accountant.

I've messed up things that could affect the tax situation before and in this situation someone who knows what they're doing will very likely save more than they cost.

As for advice on the situation without doing so, I can't answer that. I'd have thought it would be treated as a Directors Loan and the relevant taxation situation will be from that, however it is possible that it could be considered as salary depending on the circumstances.

You'll be looking at something around £1000 for accountancy fees anyway for a Limited Co, so if you're willing to commit to them doing the accounts you may get the additional advice thrown in for nothing depending on how much additional workload is caused.

2bFrank

I agree, there is nothing that cannot be fixed, however, it can end up being expensive.

Get a decent accountant who will be able to go through your options. Providing you have kept all your receipts and can identify & prove which transactions are business related and which are personal, I think you will be able to fix it.

If not, the best scenario is a big fine and paying a higher tax and worst is 'Unfit conduct' and you will be disqualified from being a director for about 15 years. The quicker you get it sorted the sooner, if you have not yet finished your first tax year then you have a better chance of resolving this