Business bank account

In message of Mon, 4 Aug 2003, L Ementary writes

Well, it will be in your trading accounts, wont it?? if you say you're a sole trader. And therefore if you complete the Self Employed section of the Tax Return (you will wont you!) the IR will know about it from your Return.

Or have I missed some ulterior motive in your question :-)

DF

"David Floyd" wrote

Where in the self-assessment tax-return do you need to specify & list all bank accounts you have? I don't remember ever having to do this - the nearest thing is just a total of interest received on bank accounts, but I'm sure I never had to specify what accounts I have??

The IR tend to be more interested in interest bearing accounts. The relevant institutions have to report amounts of interest to the IR - but there is a de minimis limit, which I cannot recall (500?).

In message of Mon, 4 Aug 2003, Doug Ramage writes

Do we know what the de minimis is anyway, isn't it a secret?

DF

In message of Mon, 4 Aug 2003, Tim writes

I didn't say that they have to be specified and listed.

But see box 3.103 of you Tax Return.

DF

My reason for asking was: a public spirited friend of mine runs a small business where he is invariably paid by cheque made out to his business name. He thought maybe 2 business bank accounts rather than one, would help the IR cut down its workload a bit.

Chears LE.

"David Floyd" wrote

If they are not specified/listed, then how on earth would "the IR get to know about it's existence or not", just from the tax return?? That is the real question the OP asked, surely?

Yep, I've just looked there. Nice and empty -- blank :-) -- as is that entire page. Something to do with the note at top of page saying "Leave these boxes blank if you do not have a balance sheet"!!

AIUI, sole traders do not need to produce a full balance sheet. At least the nice Tax Inspector from IR was happy, when he made his inspection!!

"L Ementary" wrote

I mustn't be thinking straight at the moment; remind me, how would 2 business a/c's "help the IR cut down its workload"?

You're obviously not! One of the accounts would not be shown.

EL.

In theory, only if turnover is under 15,000. In practice, consultancy type businesses (with no stock, minimal assets and low creditors) can get away with simple Income & Expenditure a/cs, even if turnover is 15k+.

The IR can always require audited accounts - even for a sole trader or partnership - if the Inspector so decides.

"Doug Ramage" wrote

Not true for me. :-)

Really? Then I guess I'd better hurry up and set up that Ltd Co then, so I can claim exemption from the requirement for audited accounts, due to small company status!

That would not protect you. The IR could still insist on audited accounts - but the Inspector would have to demonstrate evidence as to why the unaudited a/cs were unsatisfactory (likewise for sole traders/partnerships).

In message of Mon, 4 Aug 2003, Doug Ramage writes

Really!? Can you quote chapter a verse here. (Remembering that it is only Ltd Cos over a certain size that are required to have an audit)

DF

I refer you to the cases of Hunt & Co v. Joly and Wall v.Cooper - the latter being a Court of Appeal case.

Although they are both old cases (1928 and 1929), they have not been over-ruled, AFAIK.

In message of Mon, 4 Aug 2003, Doug Ramage writes

Interesting! Has the Inland Revenue applied this case law in recent times and in particular since the introduction of Self Assessment?

DF

You can open up a savings account in a Name of a business although im unsure on a current account, I would imagine thats why they have business accounts, I use to do this for various reasons (Savings Account), you may have to explain to the bank why, but ive done this with Halifax a few times, Also say you opened a Business Account in the name of Justins, then you could pay in cheques to "Justins vegtable shop" and "Justins DVD's" and so on, so that has an advantage too, you wouldnt be able to do this if you were limited though.