Is There Any Tax Implications on Transactions Through my Personal Bank?

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    I incorporated my business last year, but I haven’t got round to opening a bank account in the company’s name. All the business receipts and payments have been processed through my personal bank account. Will that have any tax implications?

     

    You must open a bank account for the company as soon as possible as using your personal bank account could create a number of problems. As the business was previously run in your own name the Taxman may not accept that the business has been transferred to your company, and want to tax you on any business income received into your personal bank account.
    If the Taxman accepts the business was transferred to the company, you have further tax problems as your personal account holds funds that belong to the company. The Taxman will argue that those funds represent either a loan to you, or your salary. In either case a tax charge will arise unless you can repay the funds to the company, and this will be difficult without a company bank account! A third option is the funds you hold represent dividends. However, to pay a legal dividend the company must first show that it is making a profit.

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