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bigduckontax
bigduckontax, Accountant
Category: Tax
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I want to start a separate project management company a side

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I want to start a separate project management company a side from my architects practive to handle building houses for clients and need information regarding how to handle clients money through my accounts but not pay tax as it would be holding the money to pay builders
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Moneys held in clients' accounts would not be taxable as the transaction would be posted as debit cash/ bank, credit clients account and thus appear as creditors in the company's balance sheet. They would not enter the Profit and Loss Account at all. The only tax exposure would be if interest were earned on the clients' accounts balances. I do hope that I have been able to resolve this little conundrum for you.
Customer: replied 1 year ago.
Many thanks so would I have to have 1 separate account solely for clients money as I would get the funds for a project and prove to builder that the money is beng held and release it a certain stages or as trades finish certain parts as usually there are many different trades people on doimestic projects. Or would each project need an account to hold the monies, any interest would be paid to clients so I would nt earn from this apart form my professional fees as a set rate
Expert:  bigduckontax replied 1 year ago.
As an accountant I am constrained by my professional institute so I would be expected to maintain different client's accounts for each individual. I know solicitors, for example, must do this. Interest I see you pass on to clients so no tax charge would fall to you. You would have to deduct tax at the basic rate, but not from the 16/17 tax year when the first 5K of interest is tax free and deposit takers will no longer deduct tax at source. Please be so kind as to rate me before you leave the Just Answer site.
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Customer: replied 1 year ago.
many thanks
Expert:  bigduckontax replied 1 year ago.
Delighted to have been of assistance. Thank you for your support.

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