Just got asked to submit all my statements

seatbeltnoob

I did see it coming to be honest. My rent went up by £300, but everything was legitimate and the bank transfers show the rent true rent being paid. I'm self employed so had loads of bank accounts to submit. Loads of little bank accounts that have <£100 in them but all had to be sent in.

I'm not worried about much, everything was fully declared and correctly and have all the receipts. One thing that making me worry a little is the capital. The ltd co has £8400 in its accounts. I have many taxes due and personal capital is £4000.

I just hope they don't say part of the £8400 is personal capital and start going back in time to re-assess everything. I will of course fight tooth and nail to get these all accepted as working capital because I have large expenditures and have plants to invest on a machine to grow the business that is circa £2500+ shipping from china.

In my post history there is some threads where someone was saying how a surf board company had £200K in company account and it was accepted as working capital. As they had genuine reasons to stockpile all the money and pay the supplier for a large container of goods.

Any idea what happens next? Will I hear from them that everything is fine. Or will it just be silent (and only message if they have concerns).

if its the former what sort of lead time can I expect them to come back to me. 

They are not going to enjoy these statements. It's going to be a big headache. Loads of micro transactions <£10 vlaue for postage payments and loads of sub £15-£30 sales. 

 

huckster

They will respond in journal. If they are happy, it will just say review complete.

Money held by business is not relevant, as business capital is not part of personal money savings and investments.

seatbeltnoob

huckster said:

They will respond in journal. If they are happy, it will just say review complete.

Money held by business is not relevant, as business capital is not part of personal money savings and investments.

I'm hoping the amount is small and doesnt need scrutiny. There was an instance where a contractor had £50K in his business account and was paying himself low wages slowly over time. I beleive his UC was terminated for that reason. He didn't have justifiable reasons to keep that level of working capital as it was a low expenditure business. So it was deemed at least £16K was to be treated as personal capital and thus claim cancelled.

Truth be told it's quite easy to put your personal savings into a company account and stuff it in there as a directors loan. it's a subjective thing and an investigator will have to decide if an individual is stuffing money into the business bank account to evade capital limits or required funds for business (or a blend of both)

£8.4K is really a very small amount for an online retail who buys stock from china and has bills going out everywhere. So I hope it just sails through smoothly without issue. But if I have to justify it. I do have at least £2K in taxes that I need to pay at year end and each month there are 1.5K on expenses that go out each month. So I can probably justify most of it.

I had a close call with a TM troll in USA. they wrapped up 500 companies across the world in an international lawsuit who were using a term that they have registered TM in US. So any unfortunate sod who sold 1 item to them even as a test purchase was wrapped up in the suit and had to pay out of court to buy their way out of it and remove USA as a destination. I was lucky I was just starting off then and was under the radar. But some established UK retailers were on the lawsuit. I would have needed funds to pay for lawyer or pay the settlement. So some money parked aside is required for running businesses.

seatbeltnoob

huckster said:

They will respond in journal. If they are happy, it will just say review complete.

Money held by business is not relevant, as business capital is not part of personal money savings and investments.

But that you for your comment, its very reassuring. I remmeber posting a while ago and people were being judgemental saying "how do you get 8 grand in your account, i don't have 2" etc. Making me feel like I'm doing something wrong. I was getting a bit panicky thinking UC will make issue of this and go back all those years of hving 6-8K in the business account and treat is as personal savings.

huckster

Of course if someone is hiding personal money in a business for no reason other than to avoid declaring to UC, then that would totally unreasonable.  But if they provided good reasons e.g. future stock investment, to cover potential liabilities, then I cannot see why adverse decision would be applied.

If someone is self-employed on UC and they are declaring true income levels in their income and expenses reporting, then UC has taken into account net profits or MIF.  If the business is then able to store up the profits, then that is not for UC to consider, as that is purely business asset and not personal.

NedS

If you are concerned, the simplest thing to do is to operate separate bank accounts for business and personal use - it is then immediately clear and obvious what constitutes business assets and what are personal assets.

My father-in-law ran his own small business for many years like this, "paying" himself £1000/month by standing order from his business bank account to his personal bank account, and paying all business related bills from the business account and all personal/household bills from his personal account.

seatbeltnoob

I filed everything on 22nd October and still have no heard a resolution from them yet.

Should I prod them for this? Maybe volunteer to edit the statements and highlight all the "internal" transfers between my accounts because there's so many accounts and these internal credits and debits would confuse them. Or just leave them to it?

My expenses are all valid. It's an ecommerce business so there are hundreds of transactions a month. The transactions are so numerous that I had to have multiple bank accounts just to seperate the trasnaction types. I have a bank account just for the purpose of paying royal mail.

Another bank account just for international payments to chinese wholesaler (for favourable forex rates).

And to allay the earlier advice, yes the personal and business transactions are completely seperate with their own bank accounts. It's a ltd co so by law I would have to have seperate bank accounts.

It will be a bit of a time waste for me. I expect them to do an audit and ask for all receipts which I have ready. What concerns me is their guidance on the self employed claimants where they say " expenses should be reasonable and not excessive". What do they mean by that? expenses are expenses they are required for the running of the business. They are either an expense or they're not.

I've had issues with the work coach in the first year of self employment when I had quarterly meetings with the work coach where they would bring up the high number of expenses. I guess they are used to deal with taxi drivers and delivery drivers who just have 1 expense (mileage) and not used to someone who hundreds of transactions.