Business Banking Practices

[Deleted User]

I recently asked a plumber to do some work for me, he works through his own Ltd company, and sure enough, he sends me an invoice on his company headed paper showing his VAT reg no. However, what struck me as an odd practice, is that he asks me to make payment to a bank account in his personal name.  Is this an acceptable practice and should he then include VAT on his invoice.   

eskbanker

As the individual and the company are separate legal entities it's certainly not recommended to use the same account for both, but I don't believe it's actually illegal to do so (happy to be proved wrong via a credible authoritative link!), and it wouldn't affect the company's right or obligation to charge VAT.  It'll probably be in breach of his bank's Ts & Cs but that's his problem not yours....

[Deleted User]

Thank you for your reply.  Your reasoning is exactly in line with mine.  It did occur to me that he may be using a personal account to avoid paying the usual bank charges applicable to business accounts.  If that's the case, it's a clever way round it to avoid the charges, But as you say, if his bank realise this practice, they may close his account.