What should you do about non business money banked into your business bank account?

Non Business Money into you bank account

If you  bank any money into your business account that isn’t from the business then you do need to make sure you keep a note as to who and what it was for. If you get a tax enquiry and HMRC ask questions on something that happened two or three years ago I’m sure most of us would not be able to remember.

For example, can you remember who gave you cash that you put into your  account two years ago that was a gift, loan or maybe  a bank transfer in that you cannot recall the name and can you prove it if asked?  I had to deal with a case just like this for a new client under enquiry from HMRC and the time taken to remember and then get proof of who the money was from was challenging.

In this case the loan was from an ex partner who had disappeared, we succeed in showing HMRC that this was not business income but it required statements from family members and it also brought back memories of the ex partner. The onus of proof is on the you the taxpayer in these situations and it can be emotionally challenging in some cases so its best avoided if at all possible

My advice is to make a note at the time just in case, better to be  safe than sorry.

bank accounts for self employed, business bank,

Share This Post

Disclaimer

All content and information on this website is for information purposes only, and it does not constitute accounting advice and does not establish any kind of accounting-client relationship by your use of this website. An accounting-client relationship with you is only formed after we have expressly entered into a written agreement with you that you have signed including our fee structure and other terms to represent you in a specific matter. Although we strive to provide accurate general information, the information presented here is not a substitute for any kind of professional advice, and you should not rely solely on this information. Always consult a professional in the area for your particular needs and circumstances prior to making any professional, legal, accounting and financial or tax related decisions.

Red Tulips Chartered Accountants do not take any responsibility for links used within this website for external internet sites. We will not accept any responsibility for any information contained on those external sites or viruses arising from any link to a third party website. 

Related Posts

Why choose a Chartered Accountant ?

5 Reasons to use a Chartered Accountant Before choosing your accountant Unless a member of the ICAEW ( Institute of Chartered Accountants) or qualified with another professional body, anyone can call themselves an accountant, even if they have no professional…
READ MORE

What is the Rent a Room Scheme?

The rent-a-room scheme provides a tax incentive for homeowners with a spare room to take in a lodger Under the scheme, an individual can generate up to £7,500 tax-free per tax year from letting out furnished accommodation in their own…
READ MORE
keyboard_arrow_up