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.

, ,

Related Posts

Menu