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Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.
Have you filed any accounts? Did you have separate account or did you just use your day to day ones please?
I have not yet filed any annual accounts. I use the services of a bookeeper, who advised me that I do nto have to do that yet. But it annual accounts will be due soon.
Why did you not open a business account?
Because I did not know that I needed to
And did you have a separate personal account or your normal daily one?
I have my normal daily one, only
all personal and business transactions have been going throih the same account
In terms of income, do you get paid by cheques? Did you issue invoices?
I issue invoices, with VAT reg Number etc. I receive payments from invoices to my current account (personal details not company details
So you have income which you can account for?
I have an income, but it is small. It is not sufficient to warrant PAYE registration. I do not have a regular income. I take money as director draw downs
But in terms of COMPANY income you can account for all receipts because you have invoices etc?
And expenses I assume you have invoices for those?
and also I can account for all debts
Ok. Then it is not all bad.
I have a record of expenses incurred
Your accountant fees will be quite high because he will have to work through the mess.
But you appear to have a record of income which can be tried up with invoice receipts and income into the bank
my concern is that I am not able t provide transparent audit trail which cna be reconciled against a separate bank account
You have a record of outgoing expenses so it will just be the case of separating those out.
That will be an opinion in terms of accounts from your accountant - there is nothing you can do about this now.
may I illustrate my concenr with an example?
You may have also committed an offence under the Companies Act for not properly accounting for income/expenses with a business bank account
say I have drawn down £3500 as a part payment against a loan I made to the company
I have a record of that in my cash book and spreadsheets
but if I was asked to show the transaction in my bank account
I would say it i 3500 of that 5000 transfer I made from saving to current account
but the figures add up
Then you may have to pay tax on the total income less expenses but anything that could normally be written off you will probably have to take a hit on.
This is why your accountant may have a hard time and that bill may be quite high
have I broken the law?
But as long as you can account for general income and expenses that just may mean you pay more tax than you would normally because you can not allow for deductions.
Yes you have.
I am a very upright sort of chap
You should be able to properly account for income/expenses and have individual accounts.
It may be something your accountant can sort out but he will take far longer than normal.
Can I clarify anything for you about this today please?
sorry, I dont understand?
Can I clarify anything for you about what we have discussed please?
I will open an account tomorrow
a separate business account
and ask my accountant to reconcile as best we can
That will be key
what esles shoudl I do to mitigate my liability?
And just expect to take a hit on tax
That is all you can do
thank you for your help
Let your accountant try and sort it and take a hit on tax for that accounting year
I dont mind a hit on the tax
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I dont want a crimianl record
thank you, bye
I wil close this now
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